[2024] UKUT 55 (LC)

I have already explained, in addressing issue 2, that where there has been a loss of amenity the decision for the FTT is not simply a choice between an RPI/CPI increase and a nil increase. An increase of less than RPI, but more than a nil increase, may well be appropriate. I have also explained that where the presumption of an RPI/CPI increase has been disapplied by one of the factors in paragraph 18(1), or by some other sufficiently weighty factor, the task of the tribunal is to determine a new pitch fee which it considers to be reasonable.

The final issue in both appeals is about how the tribunal should determine what a reasonable new pitch fee should be. The main points of dispute were whether the tribunal would be entitled to take into account personal characteristics of individual residents in determining what increase would be appropriate for each pitch, and whether some sort of apportionment of a pitch fee could be identified which would enable the adjustment made to reflect a loss of amenity to be limited to a proportion of the RPI/CPI increase.

Mr Sunderland submitted, and I have already accepted, that in principle different pitches may be affected to different degrees by a reduction in amenity. But Mr Sunderland took this proposition further and argued that factors which have nothing to do with the individual pitch would sometimes be relevant to determining what would be a reasonable increase, or a reasonable pitch fee. Two examples were suggested. The first was the hypothetical case of a resident who did not drive; such a resident, Mr Sunderland suggested, would be likely to be less affected by the closure of a car park than other residents who did drive and who parked in that car park. The second, also hypothetical, was the case of a resident who was blind and housebound; such a resident would be likely to be less affected by the loss of the Green than a sighted resident who enjoyed looking at it or walking there. In those case, Mr Sunderland proposed, the tribunal should be willing to award a full RPI/CPI increase since the resident would not have been disadvantaged by the loss of amenity.

I do not accept Mr Sunderland’s suggestion. While the statutory implied terms do not dictate an open market valuation approach to the new pitch fee (which, conventionally, would ignore any personal qualities of the buyer or seller, or the landlord or tenant) the tribunal is still required to determine the reasonable fee for the pitch, and not the reasonable fee for the current occupier, or any other particular occupier. The personal characteristics of a particular occupier have nothing to do with the pitch and are not part of what the fee is paid for. It would be unreasonable to allow them to influence the amount of the pitch fee. It would also be impractical.

Mr Sunderland next pointed out that paragraph 29 of the implied terms includes a definition of “pitch fee” which means the amount which the occupier is required by the agreement to pay to the owner for the right to station the mobile home on the pitch and for use of the common areas of the protected site and their maintenance. He suggested that the annual pitch fee increase was paid for each of these three things: the right to station a home on the pitch, the right to use the common areas of the park, and the right to have those common areas maintained by the owner. He argued that the most significant of these rights was the right to place a mobile home on the pitch and to occupy it. He proposed that that right should be assumed to account for half the pitch fee, and half of any increase. The right to use the common areas, and the right to have them maintained, were both important and he suggested that each should be taken to account for a quarter of the pitch fee, and a quarter of the annual increase. A reduction in amenity was a change to the common areas of the park, and it followed, Mr Sunderland suggested, that such a change should not be capable of affecting the amount of the RPI/CPI increase which would otherwise have been allowed by more than 25%.

Mr Sunderland suggested a second refinement, which was that when there had been a loss of amenity, rather than varying the amount of the annual pitch fee increase by some proportion of the RPI/CPI rate for that single year, an annual average over the last three or five years should be calculated. It was not reasonable for the park owner to be made to forego a proportion of a 12% increase when, if the same loss of amenity had been taken into account in the previous year, the increase which would have been lost would be some proportion of 1.5%.

The answer to both these points is the same. It is that it is for the tribunal which is tasked with determining the new pitch fee to decide what it considers to be a reasonable new figure. Parliament has chosen to adopt a relatively crude standard for pitch fee determinations and to give very little guidance on how that standard should be applied. It is not for this Tribunal to lay down a rule where Parliament had chosen not to do so.

In general, for cases where the presumption of an RPI/CPI increase has been displaced, tribunals should try to adopt a relatively simple approach, because the sums involved are modest and the material available is likely to be quite limited. Unless different pitches are affected to a materially different degree by a loss of amenity such that there is a good reason for differentiating between them in determining new pitch fees, tribunals should not feel obliged to do so. They should determine what in their view is a reasonable increase or a reasonable pitch fee having regard to the owner’s expenditure on improvements, and to the loss of any amenity at the park or deterioration in its condition and having regard to the change in the general level of prices measured by RPI or CPI, and such other factors as they consider relevant. They should use whatever method of assessment they consider will best achieve that objective. Mr Sunderland’s suggestions strike me as rather too rigid or mechanical, but that does not mean that a tribunal which sees more in them would be wrong to adopt them.