Charles Boyd & Ors v Burton Waters Moorings Limited

For the purposes of the core-terms exemption in regulation 6(2) of the Unfair Terms in Consumer Regulations 1999, a dependent contract is not treated as part of the principal contract merely because the transactions are closely linked or the contracts were made contemporaneously. The court must first identify the contract containing the challenged term and assess whether that term concerns its main subject matter or price. A separate dependent contract may then be relevant to the fairness assessment under regulation 6(1).

Whether a contractual term is unfair is an evaluative question. The court considers the contract as a whole, the circumstances at the time of contracting, and whether the term causes a significant imbalance contrary to good faith. An appellate court should not interfere absent an identifiable flaw in the first-instance reasoning.

The appellants owned residential properties at Burton Waters and were required to enter into mooring licences with Burton Waters Moorings Limited. Each licence required payment of an annual fee whether or not a boat was moored. The appellants challenged provisions concerning payment, termination, renewal and assignment under the Unfair Terms in Consumer Regulations 1999.

The Lincoln County Court gave judgment for the respondent. The appellants appealed, arguing that the mooring licences and residential leases formed one composite transaction, that the payment obligation was not a core term, and that the challenged provisions were unfair. The central issues were the interaction between regulations 6(1) and 6(2), and whether the first-instance evaluative assessment of unfairness disclosed an error of principle.

1. Appeal dismissed. Both grounds of appeal failed. The respondent’s additional grounds were not determined. Costs were adjourned, as was the respondent’s application dated 8 December 2023.
2. The residential leases and mooring licences were closely interlinked. The purchasers had to accept the licence as a condition of acquiring the properties; assignment of the lease required assignment of the licence; and the documents had been drafted to operate together. The licence was therefore dependent on the lease for regulation 6(1), despite the different contracting parties.
3. That conclusion did not alter the application of the core-terms exemption. Regulation 6(2) refers to “the contract”, meaning the contract containing the challenged term. The court must first assess the mooring licence in isolation. The licence fee was part of the price or remuneration for the mooring and fell within regulation 6(2)(b). The clause requiring payment whether or not a boat was moored was therefore excluded from the fairness assessment. Even if the documents were treated as a composite transaction, the licence fee remained part of the price payable under it.
4. The Land Registration Act 2002 made the registered Marina Lease available as background for contractual construction. The Lease and Licence could properly be read together because they expressly referred to each other and assignment of the property could not be registered without evidence of assignment of the licence. The Marina Lease was also admissible because it was registered and publicly inspectable.
5. On construction, the marina and basin were Other Premises, not Common Parts. The CRT licence fees and maintenance costs were consequently not recoverable under the residential service-charge provisions. The leaseholders nevertheless had access rights over the basin through section 62(1) of the Law of Property Act 1925.
6. The first-instance judge applied the correct composite fairness test. Her conclusion that the challenged provisions did not cause a significant imbalance contrary to good faith was evaluative. There was no identifiable flaw in her reasoning. The evidence supported the licence-fee model, including substantial marina maintenance obligations, industry practice, the parties’ knowledge of the bargain, and the absence of evidence that the structure was designed to evade statutory service-charge controls.

• Chancery Appeals, High Court: Appeal from the Lincoln County Court order dated 10 November 2022. The appeal was dismissed on both grounds.
• Lincoln County Court: Her Honour Judge Coe KC gave judgment for £1,441.31, inclusive of interest, against each appellant couple and directed further consideration of costs.