P R Hardman & Partners v Greenwood & Anor

Under a standard-form agreement governed by the Mobile Homes Act 1983, a clause requiring payment of charges for utilities ordinarily covers charges of third-party suppliers and third-party work relating to utilities supplied to the pitch. It does not authorise the park owner to recover its own administration, labour, maintenance or other service costs as a separate charge. Such costs, including costs of communal sewerage services, may be recovered only through the pitch fee, subject to the annual review mechanism and agreement or determination by the First-tier Tribunal. An implied term expanding the clause cannot be recognised where it is neither obvious nor necessary to give the agreement commercial or practical coherence.

Hardman owned a protected mobile-home park. Greenwood and Fox occupied permanent pitches under materially identical standard-form agreements. The First-tier Tribunal limited the sums payable for electricity, LPG and sewerage. The Upper Tribunal partly upheld and partly overturned that decision, rejecting Hardman’s claim to a general service charge and holding that the agreements concerned reimbursement of specific outgoings incurred in meeting liabilities to third-party service providers.

Hardman appealed, arguing that the utilities clause covered the owner’s costs of supplying, maintaining and administering utilities. The central issue was the proper construction of paragraph 3(b) of Part IV and the interaction between that clause and the pitch-fee provisions.

1. Appeal dismissed. The agreements did not permit Hardman to recover a general service charge under paragraph 3(b) of Part IV.
2. On its proper construction, the charges for electricity, gas, water and other services referred to charges by third-party utility suppliers. The reference to other services covered third-party services relating to utility supplies to the pitch. It did not cover Hardman’s own administration, labour, maintenance or service work. Costs of third-party contractors undertaking communal sewerage work were likewise outside the clause.
3. The statutory context supported that construction. The Mobile Homes Act 1983 was intended to protect occupiers and provide certainty. The agreements contained none of the usual controls applicable to service charges, such as express limits on recoverable costs or a defined mechanism for challenging the owner’s charges. The only available challenge would have required an application to the First-tier Tribunal under section 4, with the burden on the occupier.
4. Owner-incurred costs and remuneration for work done in providing or maintaining utilities and communal facilities could instead be recovered through the pitch fee. The pitch fee covered maintenance of common areas and was subject to annual review under paragraphs 16 to 20 of chapter 2 of Part 1 of Schedule 1. The retail prices index presumption was not exhaustive, and the First-tier Tribunal could determine a reasonable fee. Costs could be claimed prospectively or on account as well as after they had been incurred.
5. No term could be implied permitting recovery under paragraph 3(b). Applying the approach in Marks and Spencer plc v BNP Paribas Securities Service Trust plc [2015] UKSC 72, the proposed term was neither so obvious that it went without saying nor necessary to give the agreements commercial or practical coherence.
6. The marginal note beside paragraph 3(b) could not affect construction because paragraph 9 of Part IV excluded that use. Paragraph 21(b) and the statutory definition of pitch fee merely directed attention to sums due under the agreements and did not enlarge paragraph 3(b). The Upper Tribunal was wrong to treat communal sewerage costs as recoverable under that clause. In the absence of a respondent’s notice, past payments were unaffected; future recovery was confined to the pitch fee.

1. Court of Appeal (Civil Division): dismissed Hardman’s appeal, holding that paragraph 3(b) covered third-party utility outgoings but not the owner’s own costs or communal sewerage costs.
2. Upper Tribunal (Lands Chamber): on appeal and cross-appeal, partly upheld and partly overturned the First-tier Tribunal’s decision. It rejected a general service charge and treated the standard agreements as concerned with specific third-party outgoings.
3. First-tier Tribunal Property Chamber (Residential Property): by a decision dated 9 February 2015, limited the occupiers’ liability for electricity, LPG and sewerage charges and excluded owner administration costs and private sewerage-system costs.