Du Plessis v Fontgary Leisure Parks Ltd

A contractual power to review holiday-caravan pitch fees is not confined to operating costs by the ejusdem generis principle where its final limb covers any other relevant factor without qualifying words. Factors such as pitch location, size and grading may therefore be relevant. Under the Unfair Terms in Consumer Contracts Regulations 1999, fairness depends on whether the term creates a significant imbalance to the consumer’s detriment contrary to good faith, assessed in the contract’s context. Notice, reasons, objective limits and a continuing right to challenge legality may preserve fairness. A collective arbitration threshold can also be fair where park-wide consistency is required and court review remains available.

The claimant purchased a holiday caravan and entered a ten-year licence agreement with the respondent, which operated the park on which it stood. The respondent introduced graded pitches and increased the claimant’s annual pitch fee. After she withheld part of the increased fee, the respondent terminated the licence. His Honour Judge John dismissed her claim for wrongful termination, holding that the increase was authorised and that the relevant contractual terms were fair. The appeal challenged the interpretation of the fee-review clause, its fairness under the Unfair Terms in Consumer Contracts Regulations 1999, and the effect of the arbitration provisions.

Appeal dismissed. Jackson LJ gave the judgment, and Lloyd LJ and Ward LJ agreed. The decision below was upheld.

1. Clause 7(d) permitted the respondent to consider any factor relevant to reviewing the pitch fee. The ejusdem generis argument failed. In Stroud v Weir Associates Ltd (1987) 19 HLR 151, the review clause contained words qualifying its final limb. The present clause contained no comparable limitation. Factors including operating costs, pitch grading, location and size were therefore within its natural meaning.
2. The court applied the fairness test under regulation 5(1) of the Unfair Terms in Consumer Contracts Regulations 1999, informed by Director General of Fair Trading v First National Bank PLC [2001] UKHL 52; [2002] 1 AC 481. Clause 7(d) formed part of a balanced procedure involving notice, written reasons and a restriction to relevant factors. Individual owners could challenge the legality of an increase in court. The clause did not fall within the relied-on categories in Schedule 2, and the method of variation was explicitly described.
3. Read together, clauses 7(c) and 14 gave no individual owner a right to arbitrate the amount of the pitch fee. Arbitration required objections from at least 51% of affected owners. That arrangement was fair because fees had to be set consistently across the park and legal challenges remained available.
4. Paragraphs 16 and 28 of the Code were read consistently: paragraph 16 governed pitch-fee disputes, while paragraph 28 concerned other disputes. Jackson LJ added, as a matter not strictly necessary to the decision, that the Code was not incorporated into the licence, although a material discrepancy could bear on fairness. Section 91 of the Arbitration Act 1996 did not assist the claimant.

The increased fee was payable. Non-payment was a breach entitling termination under clause 10, so the claim for wrongful termination failed.

• Court of Appeal (Civil Division): The appeal was dismissed, affirming the judgment below. [2012] EWCA Civ 409
• Cardiff Civil Justice Centre: His Honour Judge T.A. John, on 25 March 2011, dismissed the claim for wrongful termination, holding that the fee increase was authorised and the relevant contractual terms were fair.