[2024] UKUT 197 (LC)

In his written argument Mr Payne did not suggest that the FTT could not reduce the pitch fee at all. He submitted instead that it was not entitled to reduce the pitch fee below the level that had last been agreed by the parties (either at the last review or when the agreement was entered into if there had not yet been a review).

The justification for that restriction was said to be the parties’ freedom to enter into a contract, which the Tribunal should not interfere with. Reliance was also placed on the direction in paragraph 18(1)(aa) and (ab) to have regard to deterioration only “in so far as regard has not previously been had to that deterioration or decrease for the purposes of this subparagraph”. The same limitation was included in the notes to the pitch fee review form prescribed by the Mobile Homes (Pitch Fees) (Prescribed Form) (England) Regulations 2023. Mr Payne suggested that this placed an onus on the site owner to take account of any deterioration when proposing an increase. In evidence filed in support of the application to the FTT it was suggested by Wyldecrest that its staff had considered the condition of the Park and taken it into account before proposing the 6% RPI increase which took effect in January 2022 and which had not been opposed. It was therefore submitted that any deterioration before the date of that increase could not be taken into account by the FTT when it considered the 2023 review.

On behalf of the respondents Mr Gordon-Wilson explained (as he had to the FTT) that in 2021, before the January 2022 review, the respondents had pointed out to Wyldecrest that the condition of the Park had begun to deteriorate since its acquisition the previous year. A full time gardener and maintenance man had been made redundant and specialist equipment had been disposed of. Maintenance of the grounds had become irregular and unskilled. As the FTT found in its decision, Mr Hancox, who was Wyldecrest’s Operations Manager, promised in December 2021 that the deterioration would be addressed by fortnightly grounds maintenance. Mr Gordon-Wilson explained that, on the strength of that undertaking, the respondents had decided not to dispute the 2022 increase, which took effect without reference to the FTT. Unfortunately, the promise made by Mr Hancox was not then fulfilled and the condition of the Park continued to deteriorate.

I do not accept Mr Payne’s submission that the FTT has no jurisdiction to reduce a pitch fee below the level previously agreed between the parties on the last review or at the commencement of the agreement. Paragraph 18(1)(aa) does not include any such limitation. The FTT’s task is described in paragraph 16 and is to determine whether it "considers it reasonable for the pitch fee to be changed”; if it does it then “makes an order determining the amount of the new pitch fee."

The first point to note is that paragraph 16 refers to the pitch fee being “changed”, and Mr Payne was therefore right to avoid any submission that the fee could not be reduced. A pitch ee may be changed either by increasing or reducing it.

The second is that the amount of any increase or reduction is not limited by the change in RPI since the last review. As the Tribunal has explained, paragraph 20 introduces a presumption that the pitch fee will change in line with RPI, but that presumption does not apply if an increase of that magnitude would be unreasonable having regard to the factors mentioned in paragraph 18(1). The presumption may also be displaced if some other weighty factor means that its application would be unreasonable. If one of the factors in paragraph 18 means that an increase up to RPI, or an increase limited by RPI, would not be reasonable, then a higher or lower increase can be permitted.

Finally, there is no justification for treating the fee last agreed between the parties as a limit below which the pitch fee cannot be reduced. If, in the first year of a new agreement there was no significant increase in RPI but the condition of the site deteriorated substantially, paragraph 18(1)(aa) would clearly be engaged, and the presumption of an RPI increase would not apply if that would be unreasonable having regard to the extent of the deterioration. The pitch fee, and the same is true e could then be reduced below the level agreed when the pitch was first occupied. The same is true at each subsequent review, so that the fee can be reduced below the level previously agreed or determined if that is necessary to ensure that the pitch fee is a reasonable one.

Nor do I accept Mr Payne’s submission that the FTT is bound by a site provider’s unilateral declaration that a deterioration in the condition of the site was taken into account when it proposed a previous increase (whether or not that increase was at or below the RPI rate) and so cannot be taken into account again. Paragraph 18(1)(aa) and (ab) direct the FTT to have regard to deterioration since that 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”. The sub-paragraph there being referred to is sub-paragraph 18(1), which begins with the words “When determining the amount of the new pitch fee”, before listing matters to which regard must be had. Those words indicate that the sub-paragraph is concerned with the determination of pitch fees.

Determination is one of the two methods by which paragraph 16 permits a pitch fee to be changed: the first is “with the agreement of the occupier”, and the second is if the FTT “makes an order determining the amount of the new pitch fee”. Only the FTT determines a pitch fee, and an agreement by the owner and the occupier is not a determination and is not governed by paragraph 18(1). The notes to the prescribed form to which Mr Payne referred are informative rather than mandatory and the FTT is not bound by an owner’s unilateral pronouncement that a deterioration in the condition of the site was taken into account when it proposed a previous increase. Unless the owner’s proposal is agreed by the occupiers, it remains simply a proposal, but even if it is agreed it is not a determination for the purpose of paragraph 18(1). The parties are free to agree a new pitch fee on any basis they choose and the FTT is not bound by their agreement on the extent to which a deterioration in the condition of the site should be reflected in a change in the pitch fee. No doubt the FTT would take into account an agreement between the parties at a previous review when considering whether a deterioration in the site’s condition meant that it was reasonable to displace the presumption of an RPI increase but it would still be required to make up its own mind on the reasonable pitch fee when it applied paragraph 18(1)(aa) to a subsequent determination.

Finally, on this ground of appeal, Mr Payne referred to paragraph 29 of the implied terms which explains that the pitch fee is “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 the use of the common areas of the protected site and their maintenance”. He wished to argue that the use of the common areas was only part of the package of rights for which the pitch fee was paid and that the FTT had been wrong in principle to wipe out the whole of the current and previous RPI increases because of only one element of that package. I do not think that argument is open to him. There is much that might have been said about the quantum of the adjustment made by the FTT to reflect the deterioration of the Park, but Wyldecrest asked it for permission to appeal on valuation and the FTT refused. No request was then made to this Tribunal for permission and I am satisfied that valuation issues are therefore not within the scope of the appeal.

The FTT was therefore entitled to reduce the pitch fee to whatever extent it considered was reasonable, and was not required to limit the reduction so as to preserve the figure agreed between the parties for the January 2022 review.