[2024] UKUT 55 (LC)

This issue arises because in each case the relevant reduction in amenity occurred more than twelve months before the pitch fee review date, and a full RPI/CPI increase had previously taken place by agreement without any reference to the tribunal and without any mention having been made on either side of the effect of the reduction. Thus, the changes at Willow Park had occurred during 2020 and a pitch fee review increasing fees by the CPI rate of 1.3% had been instigated without challenge with effect from 1 January 2021. The changes at Penwortham Park had also taken place before 1 January 2021 and there had been an uncontested pitch fee review by reference to RPI of 1.3%.

Mr Sunderland submitted that the residents’ acquiescence in pitch fee reviews after the relevant reductions in amenities had used up their opportunity to have the changes taken into account for the purpose of avoiding the presumption of an RPI/CPI increase. What would be unfair, he suggested, would be to allow residents to ignore a decrease in amenity in years when the relevant inflation index was very low, but then to rely on it in years, like 2022 or 2023, when inflation was very high.

In its original form, before the amendments made to the implied terms by the Mobile Homes Act 2013, paragraph 18(1)(b) provided that when determining the amount of a new pitch fee particular regard was to be had to “any decrease in the amenity of the protected site since the last review date”. By paragraph 18(1)(a), particular regard was also to be had to a site owner’s expenditure on improvements “since the last review date”.

If the implied terms had remained in that form, there would have been no doubt that Mr Sunderland’s submission would have been correct, and that any changes whether in the form of reductions in amenity or expenditure on improvements would be taken into account at the next review date or the opportunity to have them taken into account for the purpose of paragraph 18(1) would be lost.

But the implied terms have not remained in that form. With effect from 26 May 2013 in England, and 1 October 2014 in Wales, the implied term has required particular regard to be had to:

“[…] any deterioration in the condition, and any decrease in the amenity, of the site or any adjoining land which is occupied or controlled by the owner since the date on which this paragraph came into force (in so far as regard has not previously been had to that deterioration or decrease for the purposes of this subparagraph)”

(in England, paragraph 18(ab), Schedule 1, Chapter 2, Mobile Homes Act 1983; in Wales, paragraph 18(1)(b), Schedule 2, Mobile Homes (Wales) Act 1983)

No corresponding change has been made to the requirement to take improvements into account, and in both statutes paragraph 18(1)(a) still refers to expenditure on improvements “since the last review date”.

The change in the wording of the implied term has made a real difference to the treatment of adverse changes. Previously the only type of change which was within the paragraph was a “decrease in the amenity of the protected site”. Now particular regard must also be had to a “deterioration in the condition” of the site. Additionally, and for the first time, other land must also be taken into account: a deterioration in the condition of adjoining land occupied or controlled by the owner, or a decrease in the amenity of such adjoining land, have been added as factors to which particular regard must be had.

Of relevance to the issue now being considered, there has also been a change in the time when the relevant deterioration in amenity may have taken place. The point of reference is no longer the last review date but has become “the date on which this paragraph came into force” (25 May 2013 in England and 1 October 2014 in Wales). Any deterioration or decrease since that date must be taken into account, unless the exception in brackets applies. The exception is expressed in convoluted language: “(in so far as regard has not previously been had to that deterioration or decrease for the purposes of this subparagraph)”. It means: unless that deterioration or decrease has previously been taken into account when determining a new pitch fee.

The correct answer to issue 3 depends on the meaning of that exception.

I am satisfied that the exception applies only if there has been a previous pitch fee review since the relevant deterioration or decrease which has involved a determination by a tribunal, and in which the deterioration or decrease has been taken into account. In my judgment the exception does not apply where the owner has obtained an increase since the deterioration or decrease simply by making a proposal under paragraph 17 which the occupier has agreed to or acquiesced in without the involvement of the tribunal. I have reached that conclusion for the following reasons.

First, the clear change in language introduced by the 2013 amendments must have been intended to bring about a real change in the treatment of losses of amenity. It cannot have been intended that the previous rule, that only changes since the last review date, should continue to apply. That would be the effect of accepting Mr Sunderland’s submission.

Secondly, the exception applies only where the relevant deterioration or decrease has previously been “taken into account”. Where the statutory presumption of an RPI/CPI increase has been applied, the only matter which is taken into account is the rate of change in the relevant index; the facts on the ground, as it were, are not taken into account. I appreciate that it might be said that both the owner who proposes an RPI/CPI increase and the occupier who accepts it might as part of that process consider whether any decrease in amenity has been sufficient to justify a different pitch fee from the one proposed, and so might be said to have taken it into account, but it seems to me that a more deliberate and consequential taking into account is what is being referred to.

Thirdly, and more significantly, the exception applies where the deterioration or decrease has been taken into account “for the purposes of this sub-paragraph”. The sub-paragraph is sub-paragraph 18(1) which provides instructions “when determining the amount of the new pitch fee”; the purpose of the sub-paragraph is therefore the determination of a new pitch fee. Paragraph 17(1) provides that the pitch fee can only be changed in one of two ways; either “with the agreement of the occupier” or “if a tribunal … makes an order determining the amount of the new pitch fee”. There is a distinction between a new pitch fee which is agreed and one which is determined by a tribunal, and the purpose of paragraph 18(1) is solely in connection with the latter. It follows that an agreement between a site owner and the occupier of a pitch over a new pitch fee is not a determination; whatever they may have taken into account when reaching their agreement will not have been taken into account for the purposes of sub-paragraph 18(1) and will not fall within the exception.

Mr Sunderland made the perfectly reasonable point that if a loss of amenity could only trigger the exception in paragraph 18(1)(ab) once it had been taken into account in a tribunal determination, a site owner who agreed that there should be no increase, or a below RPI/CPI increase, to take account of a loss of amenity would be at risk of the same factor being relied on in a future pitch fee review. There are two answers to that concern. First, the problem could be avoided by the owner making an application to the tribunal asking it to make a determination of the new pitch fee in the agreed amount. That would be cumbersome but effective to avoid the risk of the same loss of amenity being taken into account in a future review. Secondly, as the Tribunal explained in Vyse at [54], the factors identified in paragraph 18(1) are not the only factors which a tribunal may take into account when determining a new pitch fee. If a tribunal was satisfied that a loss of amenity had already been fully reflected in a previous new pitch fee which had been agreed rather than determined, while it would be required to have “particular regard” to the loss of amenity, it would not be obliged to ignore the fact that the same loss of amenity had already been taken into account when determining the current pitch fee.

For these reasons, in my judgment the residents of both parks were entitled to rely on the decrease in amenity as a reason why the presumption in paragraph 20A of an RPI/CPI increase does not apply to their 2023 pitch fee review.