Warfield Park Homes Ltd v Warfield Park Residents Association

In a pitch-fee review under Mobile Homes Act 1983, the arbitrator or County Court has a wide discretion to consider relevant factors, including statutory changes affecting resale charges, maintenance costs, losses and the overall fairness of the future fee. Shared leakage or system-loss costs may be apportioned without a finding of contractual breach. Appellate intervention is limited to obvious error causing injustice or a point of general importance. The agreement cannot be rewritten to impose policy-based limits. VAT depends on whether maintenance costs are incorporated into an exempt pitch fee or separately charged.

Warfield Park Homes Ltd appealed against the Recorder’s determination of annual pitch fees payable by occupiers represented by Warfield Park Residents Association. The disputes concerned water and electricity resale charges, standing charges, maintenance and leakage losses, administrative costs, VAT and costs. The Recorder had exercised the County Court’s jurisdiction under section 4 of the Mobile Homes Act 1983, despite arbitration clauses in the written agreements. The Court of Appeal considered whether the Recorder had made errors of law or exceeded the discretion conferred by the pitch-fee review clause, and how any errors should affect the resulting adjustments.

Lord Justice Carnwath delivered the judgment and Lord Justice Gage agreed. The appeal was allowed in limited respects, with the remaining grounds dismissed.

1. Jurisdiction and discretion. Section 4 of the Mobile Homes Act 1983 gives the County Court jurisdiction despite the arbitration clause. The court stands in the shoes of the arbitrator and may determine the figures themselves. Clause 9(2)(b) confers a wide and unstructured discretion to consider relevant factors, including statutory changes. The quasi-arbitral nature of the process also requires restrained appellate review, focused on an obvious error causing injustice or a point of general importance.
2. Charges and statutory interventions. The standing charge of £1.84 per month was reinstated because the Recorder had wrongly treated the evidence as showing no contrary case and had no proper basis for his presumption of double charging. The effects of the Water Resale Order 2001 and the Ofgem Direction were relevant to the overall pitch-fee assessment. The £12,000 water adjustment and the £20,000 electricity adjustment were therefore upheld. The statutory policy did not legally require those factors to be excluded.
3. Leakages and power loss. The Recorder could treat water leakage as a shared problem and apportion its cost without first finding a breach of the maintenance obligation. The same sharing approach was permissible for electricity loss. However, because electricity was measured at individual homes, the occupiers were not paying for system loss outside their homes. The adjustment therefore had to increase, rather than reduce, the pitch fee.
4. Administration costs and VAT. The water administration charge was reduced to the amount permitted by the Water Resale Order. The electricity administration allowance was upheld because supporting evidence existed. VAT concerned the owner’s ability to recover VAT paid to contractors, not the direct charging of VAT to residents. VAT was allowed on the £12,000 water-maintenance figure but not on the £20,000 electricity figure, which included a substantial profit element.
5. Final approach. The court could not rewrite the agreement to introduce policy-based qualifications or limitations. The order was adjusted accordingly, and costs were left for separate determination.

1. Court of Appeal (Civil Division): In [2006] EWCA Civ 283, the appeal was allowed in limited respects. The standing charge was reinstated, the water administration charge was reduced, the electricity-loss adjustment was changed from a deduction to an addition, and VAT was allowed on the £12,000 water-maintenance figure but not on the £20,000 electricity figure. Other grounds failed.
2. Reading County Court: Mr Recorder Flather determined the pitch-fee questions under section 4 of the Mobile Homes Act 1983. The judgment does not provide a separate citation for that decision.