Section 4: Calculation of the proposed new pitch fee The proposed new pitch fee has been calculated as (A) plus (B) plus (C) minus (D) where: (A) is the current pitch fee of £27.79 (B) is the Retail Prices Index (RPI) Adjustment £1.08 calculated from a percentage increase/decrease of 3.9% (C) is the recoverable costs of £…….. (D) is the relevant reductions of £…... v (B) The RPI adjustment In accordance with paragraph 20(A1) of Chapter 2 of Part 1 of Schedule 1 to the Mobile Homes Act 1983, we have calculated the RPI adjustment as the percentage increase in the Retail Prices Index (RPI) over 12 months by reference to the RPI published for January 2013 which was 3.9% Note: For further information on the correct RPI figures to use refer to the section on the RPI adjustments in the notes at the end of this form. [2015] UKUT 194 (LC)
IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE
UT Neutral citation number: [2015] UKUT 194 (LC)Venue FIRST TIER TRIBUNAL (PROPERTY CHAMBER)
Between
Section 4: Calculation of the proposed new pitch fee The proposed new pitch fee has been calculated as (A) plus (B) plus (C) minus (D) where: (A) is the current pitch fee of £27.79 (B) is the Retail Prices Index (RPI) Adjustment £1.08 calculated from a percentage increase/decrease of 3.9% (C) is the recoverable costs of £…….. (D) is the relevant reductions of £…...(B) The RPI adjustment In accordance with paragraph 20(A1) of Chapter 2 of Part 1 of Schedule 1 to the Mobile Homes Act 1983, we have calculated the RPI adjustment as the percentage increase in the Retail Prices Index (RPI) over 12 months by reference to the RPI published for January 2013 which was 3.9% Note: For further information on the correct RPI figures to use refer to the section on the RPI adjustments in the notes at the end of this form.MR P SHERWOOD AND OTHERSBefore: Martin Rodger QC, Deputy PresidentMr Paul Kelly of Tozers Solicitors for the AppellantMr P Sherwood, Mr B Thompson and Mr M Spivey in person for the Respondents
[31]“The Court of Appeal cases show a consistent approach in relation to statutory requirements to serve a notice as part of the process for a private person to acquire or resist the acquisition of property or similar rights conferred by the statute. In none of them has the court adopted the approach of "substantial compliance" as in the first category of cases. The court has interpreted the notice to see whether it actually complies with the strict requirements of the statute; if it does not, then the Court has, as a matter of statutory interpretation, held the notice to be wholly valid or wholly invalid .”33. This stricter approach has the great advantage of certainty in relation to property rights. It seems to me to be applicable to the procedures, statutory in origin, for initiating a review of pitch fees under agreements to which the 1983 Act applies. Perhaps more importantly, p aragraph 17(6A) of Chapter 2 of Part 1 of Schedule 1 to the Act is explicit in prescribing that a notice which proposes an increase in the pitch fee “is of no effect unless it is accompanied by a document which complies with paragraph 25A”. That express statement of the consequences of non-compliance removes any doubt, and leaves no room for considerations of whether any prejudice has been suffered as a result of the non-compliance. The only relevant question is therefore whether the first review form complied with paragraph 25A.34. Paragraph 25A(1)(b) requires that the notice must “ specify any percentage increase or decrease in the retail prices index calculated in accordance with paragraph 20(A1)” and i t is agreed that the notice failed to do so. The percentage increase in RPI which was specified was not calculated in the required manner. Mr Kelly submitted on behalf of the appellant that the first notice was nevertheless compliant with paragraph 20(A1) because it would have been obvious to any reasonable recipient of the notice who considered its contents that the information contained in it was incorrect, and that the document should be construed as the recipient would have understood it to have been intended. He did not suggest that the recipient of the notice should be assumed to have the correct RPI figures immediately in mind but rather that they would readily be able to ascertain the appropriate RPI increase, as Mr Sherwood had done, because the prescribed form identified precisely how the that was to be done. Mr Kelly argued that this approach was in accordance with the decision of the House of Lords in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 . That decision concerned the proper construction of contractual notices containing an obvious error; if notwithstanding a defect in its form, a reasonable recipient of such a notice would have been left in no doubt what it was intended to achieve, the notice would be valid.35. I cannot accept Mr Kelly’s argument, which in my judgment finds no support in Mannai . The error in the first notice was not obvious, and indeed the figure was quite close to being accurate. The sort of research which Mr Kelly postulated is exactly the sort of research which the recipient of the notice would assume the giver of the notice had already carried out. The recipient was entitled to assume that the information contained in the form was accurate, except where it was obvious that an error has been made. In this case it was not obvious that there had been an error, nor what the correct figure ought to have been.36. On this aspect of the appeal I am quite sure that the FTT was correct in finding that the first attempt to initiate the pitch fee review was of no effect. Although the notice and accompanying document were only a proposal, and could not give rise to a new pitch fee unless and until the proposal was agreed, the failure to calculate the RPI adjustment using the method prescribed in para 25A was fatal. Issue 2: the third notice37. No reliance is now placed on the second notice. The sole remaining issue concerns the third notice which, it will be remembered, adopted the January 2013 figure for the increase in RPI but used it to calculate a new pitch fee which it proposed should take effect from 28 April 2014, which was a date after the 2014 review date. The question is whether that was permissible, or whether, as the FTT decided, the right to a review based on the 2013 RPI increase expired on the 2014 review date.38. Mr Kelly submitted that the statutory implied terms did not exclude the possibility of more than one review taking effect in a single year. On the contrary paragraph 17(1) clearly establishes a principle of annual reviews and paragraphs 17(6) to (10) specifically permits late reviews. To the extent that the notes to the prescribed form of review notice (on which the FTT relied) suggested otherwise, they are incorrect and cannot modify or supplant the clear statutory scheme.39. Mr Sherwood said that nobody objected to paying a proper increase, but that the effect of the three notices which had been served was total confusion. He invited me to accept the conclusion of the FTT that the third notice was also of no effect.40. The scheme described in paragraph 17 provides for annual pitch fee reviews and lays down a procedure for commencing the review. The pitch fee “shall be reviewed annually at the review date” (para 17(1)) and the owner “shall serve on the occupier a written notice” at least 28 clear days before the review date (para 17(2)). If this is done the new pitch fee which is agreed or determined by the FTT will take effect from the review date (para 17(3) and 17(4)(c)). The imperative use of “shall” does not, however, mean that if a notice is not given 28 days before the review date the right to the review is lost. All that is lost is the right to a review taking effect from the review date, because paragraph 17(6) gives access to the alternative timetable in sub-paragraphs (7) to (10) which provide for a late review.41. If the owner does not serve a pitch fee review notice “by the time by which it was required to be served” (i.e. at least 28 days before the review date, as required by paragraph 17(2)) but does so “at any time thereafter” (as permitted by paragraph 17(6)(b)) then sub-paragraphs 17(7) to (10) apply. A late review notice given under paragraph 17(6)(b) serves the same purpose and takes the same form as an “in-time” review notice under paragraph 17(2): it sets out the owner’s proposals in respect of the new pitch fee and must be accompanied by a document which complies with paragraph 25A. Its effect mirrors the effect of an in-time notice with the sole exception that any new pitch fee which is agreed or determined by the FTT following a late review notice will take effect not from the review date but from the 28 th day after the date of service of the late review notice (paras 17(7) and 17(8)(c)). There is a slight difference in the figures used to calculate the relevant RPI increase although unless an in-time notice is served long before the review date the difference is likely to be insignificant. 42.
(b) :
“at any time thereafter”
. Those words appear to indicate quite clearly that there is no terminal date after which a late review notice may no longer be served; such a notice may be served “at any time” after the time referred to in paragraph 17(2) which is 28 clear days before the review date. 43. The absence of any terminal date for the service of a late review notice is in contrast to paragraph 17(9) which creates a clear window within which an application to the FTT under sub-paragraph (8) must be made for the determination of a new pitch fee after a late review notice has been given; such an application may be made “at any time after the end of the period of 56 days beginning with date on which the owner serves the notice under sub-paragraph (6)(b) but , in the case of an application in relation to a protected site in England, no later than four months after the date on which the owner serves that notice.” The creation of this window is relevant to the issue in this case only because it makes it less likely that there is some unspoken but implicit requirement that a late review notice must be served within a similar restricted window. 44. The practical operation of sub-paragraphs 17(7) and 17(8) are also inconsistent with there being a requirement that a review notice for a particular year must be served to take effect before the next review date. If there was such a requirement it would not be possible to serve a late review notice in the last 28 days before a review date, since any new pitch fee agreed or determined following such a notice would become payable on or after the next review date. That is what occurred in this case but if that timing is intended to be prohibited, as the FTT found, there is no hint of that additional restriction in sub-paragraphs 17(6), (7) or (8). 45. The language and structure of paragraph 17 therefore seem to me to be firmly against the FTT’s conclusion that a late review notice may not be served to take effect at any time after the next review date. I bear in mind also that the general rule in rent review, settled since the decision of the House of Lords in United Scientific Holdings v Burnley Borough Council [1978] AC 904, is that time is not of the essence of the right to a review and that some positive indication either in the language or the structure of a rent review scheme is required before the right to a review will be lost by a delay in its commencement. 46. Why was the FTT driven to reach its contrary conclusion? It gave two reasons in paragraph 10 of the decision. The first referred to the guidance notes to the prescribed form, which I will consider shortly. The second relied on the definition of “review date” in paragraph 29 as “the date on which the pitch fee will be reviewed in each year ”. As to that second reason the pitch fee is only reviewed “on” the review date in each year if an in-time review notice is given under paragraph 17(2) and the owner’s proposal is agreed before the review date; in any other case the new pitch fee will not be known on the review date; the reference to a review “on” that date, means a review “as from” that date (as paragraph 17(4)(c) spells out). Nor is there any expectation that the process of pitch fee review will necessarily be completed in the year to which the review relates (as this case illustrates). It does not seem to me to follow from the definition of the review date that that the most recent review date to have passed is the only date from which a late review can take effect. It would also be surprising if such a fundamental feature of a review scheme was introduced in such an opaque way, through a definition. 47. As to the guidance notes which the 2013 Form Regulations require to be included in a review notice, it is quite true, as the FTT noted, that they indicate that a review may only take place in the period before the next review date. Under the heading “review and late reviews” the notes contain the following unequivocal advice: · “If the site owner misses the review date a proposed change to the pitch fee can be made to take effect at a later time. Providing a minimum notice period of 28 days is given a late review can be proposed to take effect at any time after the review date and before the next review date. · The “next review date” is the date 12 months from the review date. This applies whether or not the current review is late. It means, for example, if the review date is 1 April 2014, but the review is late and does not take effect until 1 July, the next review date will be on 1 April 2015, rather than 12 months from the effective date of the current review. · As reviews are conducted annually, if the site owner does not propose a change in the pitch fee on the review date or before the next review date (in the case of a late review) the review is deemed to have been conducted for the year in question. This means, for example, that if a review date was 1 April 2014, but the site owner did not initiate a review before 1 April 2015, any charges (including RIP) attributable to the 2014 review cannot be included in the 2015 review.” 48. The notes are prefaced by a statement that “ these notes are for guidance only and do not purport to provide a definitive statement of the law. They are an informed commentary and can be taken to represent the view of the government department responsible for the 2013 Forms Regulations (the Department for Communities and Local Government) as to the effect of paragraph 17. It is my task to construe the 1983 Act, rather than the notes to the prescribed form, but it is nonetheless discomforting that the notes interpret paragraph 17 in a manner which is quite contrary to the conclusion I have reached. I have reconsidered my conclusion in the light of the notes, but I can find nothing in the statutory language which supports the guidance given by the notes that a later review can only take effect before the next review date or that if a review notice is not served before the next review date the review is “deemed to have been conducted for the year in question”. The language seems to me to be clearly to the opposite effect. 49. I appreciate that the possibility that a number of pitch fee reviews may take place in a single year may be an unattractive one, but the possibility of a large increase taking account of RPI changes over more than one year is ameliorated by the fact that any such increase will not be capable of taking effect retrospectively. Any increase will take effect only from the date which is 28 days after the service of the late-review notice and any arrears will be calculated from that date and no earlier. If a review had already taken place in one year it would not, I think, be possible for an owner to seek to activate a review from any previous year in which it had not been implemented. I also appreciate that the prescribed form of notice is not well adapted to a proposal for a single increase taking into account more than one annual RPI increase since the last review and that further issues may arise as a result. 50. I am nonetheless satisfied that the notes to the prescribed form are an unreliable guide to the effect of paragraph 17, and that the FTT reached the wrong conclusion on the effect of the third notice and I set that part of its decision aside. In my judgment the third notice validly initiated the 2013 review. Having regard to the presumption in paragraph 20(A1) that a pitch fee will increase annually by RPI and to the absence of any other issue between the parties on the amount of the increase, I substitute a determination under paragraph 16 that the amount of the new pitch fee is the amount stated in the third notice served on each of the respondents (£28.71 in the example shown to me) which will take effect on 28 April 2014, the date stated in the notice. Martin Rodger QC Deputy President 21 May 2015 Appendix The respondents Respondent’s name Pitch Mr P Sherwood 14 Sixth Avenue, Shaws Trailer Park, Harrogate, HG2 7PP Mr Crouch 11 Sixth Avenue Mr & Mrs M Spivey 20 Fourth Avenue Ms Walker 2A Third Avenue Mr Thompson 19 Second Avenue Mr & Mrs M Stubbs 5 First Avenue Mr & Mrs K Bell 8 Third Avenue Mr Eaton 3 Sixth Avenue Mr I Fraser 5 Fourth Avenue Mr D Fraser 7 Fourth Avenue Mr & Mrs P Stothard 14 Fourth Avenue Mrs L Tye 3 Third Avenue Mrs E Thompson 7 Second Avenue Mr L Williams 15 Fourth Avenue Mr B Thompson 37 Main Avenue