[2024] UKUT 55 (LC)

Mr Sunderland submitted that the pitches on each park did not all benefit to the same extent from the amenities which had been withdrawn. At Penwortham Park some pitches faced directly onto the Green while others were a long way from it, had no view of it, and had access to much more extensive open space beyond the boundaries of the Park accessible by public footpath. Some pitches were very close to the car parking area and others were further away, so that visitors would be less likely to make use of it. At Willow Park there were two car parking areas at opposite ends of the Park, and those who lived on pitches adjacent to the top car park would be unlikely to be affected by the withdrawal of the bottom car park. Yet in both cases the tribunal had applied a blanket approach to all of the pitches under consideration, allowing a nil increase in every case. and, to a lesser extent Mr Ibbotson, took issue with Mr Sunderland’s account of the facts. Mr Fulham emphasised in particular that all of the residents of Penwortham Park derived enjoyment and benefit from the preservation of the Green as an open space. At Willow Park, the consequences of the withdrawal of the car park may have been more widely experienced than Mr Sunderland appreciated, as visitors, carers or residents who did not have space to park on their own pitch may have been displaced to the Park roads or alternative car parks with knock-on effects throughout the Park.

Secondly, Mr Sunderland submitted that there was no justification for adopting a binary approach by which a choice was made between an RPI or CPI increase on the one hand, or no increase at all on the other.

It is convenient to begin with the second of these points.

The tribunal’s task when an application is made to it under paragraph 16 of the implied terms is to determine a new pitch fee for the particular pitch to which the application relates. If a number of applications are made to the tribunal for different pitches on the same park, the tribunal’s job is to determine each of them. On some parks residents of similar pitches may pay very different pitch fees, and in monetary terms the increase (or decrease) appropriate to different pitches will not be the same.

Where there is no reason to depart from the statutory presumption of an RPI /CPI increase, the increase in percentage terms for all pitches with the same review date will be the same. In that case there may be no need to distinguish between different pitches in any way, and it may be sufficient for the tribunal to state what the percentage increase is to be. But in cases where it is said that the presumption does not apply, because of a factor falling within paragraph 18(1), or where it is said it has been displaced by some other weighty factor, the tribunal will need to consider whether the factor which justifies a higher or lower increase than RPI/CPI affects all pitches equally. If it does not, then it is likely to be necessary for the tribunal to determine what is the reasonable pitch fee for each pitch, or each group of pitches affected to the same extent, rather than to adopt a blanket approach.

In principle, therefore, I agree with Mr Sunderland that each tribunal should have considered whether individual pitches were affected to different degrees by the decrease in amenities.

It is possible that, in each case, the tribunal did consider this issue and concluded that all pitches under consideration were affected to the same extent by the withdrawal of the car park or the Green. If so, they would have been entitled to apply the same adjustment, or no adjustment, to every pitch fee. But if that is what the tribunals were doing it was necessary for them to say so, so that the parties could understand why different pitches were treated identically.

The need for each tribunal to explain exactly what it was doing was of particular importance in these cases because, in each, the tribunal concluded that no increase was appropriate. It is possible that both tribunals considered that each pitch was affected equally by the loss of amenity and that, in view of that loss, the reasonable increase in the pitch fee was no increase at all. But it is also possible, and perhaps more likely, that the tribunals considered that they were required to make a choice between the full inflation linked increase and a nil increase. If that was the tribunals’ thinking it would have been erroneous.

Nothing in paragraphs 18 or 20A of the implied terms provides that the pitch fee must either increase by a rate equal to the change in RPI/CPI or stay the same, with no other outcome being possible. The purpose of disapplying the presumption of an RPI/CPI increase where there has been a loss of amenity is not to punish the park owner for reducing amenities (which they may have been entirely within their rights to do) but to set a new pitch fee which properly reflects the changed circumstances. Those changed circumstances obviously include the reduction in amenity, but they will also include any change in the value of money i.e. inflation since the last review took place. For it to be appropriate for there to be no change in the pitch fee at all it would be necessary for factors justifying a reduction to (at least approximately) cancel out inflation and any other factors justifying an increase.

Mr Sunderland drew my attention to a number of tribunal decisions in which the presumption of an RPI/CPI increase had been displaced. In a decision of the Southern panel concerning St Dominic Park at Callington in Cornwall the FTT was satisfied that the condition of the Park had deteriorated as a result of development works to such an extent that the reasonable course was to limit pitch fee increases to half of the rate of increase in RPI. In another, concerning Fiveways Park on The Wirral, the Northern panel of the FTT had reduced an RPI increase of 13.4% to one of 12% because of the site owner’s failure to undertake routine maintenance of the sewerage system. No doubt there are other examples which illustrate the willingness of tribunals to adopt an intermediate position between a nil increase and a full inflation linked increase in appropriate cases.

I am satisfied that in these cases both the FTT and the RPTW were entitled to find that the presumption of an RPI/CPI increase did not apply. They may also have been entitled to find that a nil increase was justified, but only if they made an assessment that all pitches were affected equally and that the loss of amenity cancelled out any increase which might have been justified by inflation. But if that was how each tribunal reached its conclusion it gave no indication of that thinking in its decision. Both decisions must therefore be set aside, either because of an error of law in treating an RPI/CPI increase or a nil-increase as the only available options, or for a failure in each case to provide a sufficient explanation of the tribunal’s reasons for allowing no increase at a time of unusually high inflation.