Charles Boyd & Ors v Burton Waters Moorings Limited

The Court dismissed an appeal against a county court judgment for unpaid mooring licence fees. The principal legal questions were whether a standard form mooring licence formed part of a single composite contract with the residential lease for the purposes of Directive 93/13 and the Unfair Terms in Consumer Contracts Regulations 1999, and whether specific licence terms were unfair under the Regulations. The court accepted that the licence was dependent on the lease in practical terms but held that Regulation 6(2) (the "core terms" exemption) must be applied by reference to the licence itself; the obligation to pay a licence fee (clause 4) was a core term relating to the price and therefore excluded from assessment for fairness. The judge below was held to have applied the correct tests of fairness and contract construction and to have reached permissible evaluative conclusions on the facts, including that purchasers had accepted the licence and that fees met genuine marina maintenance and Canal and River Trust liabilities.

This appeal arose from an order of Her Honour Judge Coe KC dated 10 November 2022, giving money judgment for unpaid mooring licence fees against several residential lessees of units at Burton Waters. The appellants contended (1) that the mooring licence and the residential lease formed a single composite contract so that the disputed licence terms could not be treated as core terms under Directive 93/13 and the Unfair Terms in Consumer Contracts Regulations 1999, and (2) that specified licence clauses were unfair.

Background and documents:

• Burton Waters is a mixed residential and commercial marina development. The development structure included: (i) a long lease of the Marina Basin (the "Marina Lease") originally granted by Eastman; (ii) a 60-year CRT (Canal & River Trust) connection licence under which connection fees and certain maintenance obligations were payable; (iii) individual 999-year residential leases of plots; and (iv) mooring licences granted to residential purchasers by Burton Waters Moorings Limited (the "Licence").
• The central contractual documents were the CRT Licence, the residential Lease, and the Mooring Licence. The Licence obliged payment of an annual licence fee (increased by reference to RPI) and included termination, non-assignment and exclusion/limitation terms.

Procedural posture: the matter reached the High Court as an appeal from the county court order. The appellants challenged the judge's finding that the Licence could be assessed separately and that its core payment obligation fell within Regulation 6(2) and so was excluded from unfair terms assessment; they also challenged the judge's overall evaluative findings that the licence terms were not unfair.

Issues considered by the court:

• Whether, for the purposes of Regulation 6(1) and (2), the "main subject matter of the contract" and the "price or remuneration" should be assessed by treating the Licence and Lease as a single contract or by assessing the Licence alone.
• Whether the obligation to pay the Licence Fee was a "core" term excluded from assessment for unfairness under Regulation 6(2).
• Whether specified Licence clauses (termination for breach, payment whether or not a boat is moored, RPI increases, restraints on assignment and sub-licensing, and limitations of liability) were unfair under Regulation 5 when assessed against the overall bargain.
• Whether service-charge provisions in the residential Lease could have been used to recover the same CRT/maintenance costs (and whether that affected the fairness analysis).

Court's reasoning (concise):

• The court accepted that the Licence was practically dependent upon the Lease (buyers could not complete without the Licence) and that the documents were drafted to operate together. However, Regulation 6(2) must be applied by reference to the contract in issue (the Licence) and interpreted restrictively. There is no textual basis in Regulation 6(2) for treating a dependent separate contract as merged into the contract under consideration for the purpose of the core-term exception.
• Applying that approach, the Judge below was entitled to find that clause 4 (the obligation to pay the Licence Fee whether or not a boat was moored) concerned the adequacy of price or remuneration and therefore fell within the core-term exemption in Regulation 6(2)(b), so it was excluded from unfairness assessment.
• On the remaining pleaded fairness grounds the judge carried out the composite assessment required by the Directive and Regulations, considered the parties' commercial context, evidence that licence income was used to meet genuine CRT and maintenance costs, and the fact that purchasers had notice and legal opportunity. Her evaluative findings and conclusion that the licence terms were not unfair were within the permissible range of judgment and were not susceptible to successful appellate intervention.
• The court further held that, on proper construction (including having regard to the registered Marina Lease), the CRT licence fees and primary marina maintenance obligations were not recoverable by the management company under the Lease's service-charge provisions; that construction supported the trial judge's findings about the necessity and purpose of the Licence fees.

The appeal was dismissed and costs and ancillary directions were remitted to be fixed by the court below.

The appeal is dismissed. The High Court held that, although the mooring licence was practically dependent on the residential lease, Regulation 6(2) must be interpreted restrictively and applies to the particular contract (the licence) itself; the obligation to pay the licence fee was a core term concerning the price or remuneration and therefore excluded from assessment for unfairness. The judge below had correctly applied the legal test for unfair terms, made permissible evaluative findings about notice, commercial context and legitimate maintenance costs, and was entitled to conclude the licence terms were not unfair. The appeal did not establish any reversible error in law or reasoning.

Appeal from the County Court (Lincoln) Order of Her Honour Judge Rosalind Coe KC dated 10 November 2022; judgment of the High Court (Chancery Appeals, Birmingham District Registry) delivered by Leech J, Neutral Citation [2024] EWHC 138 (Ch).