Du Plessis v Fontgary Leisure Parks Ltd

This judgment is in eight parts, namely,

The issue in this appeal is whether the owner of a holiday caravan park acted lawfully in raising the annual pitch fees which it charged.

Holiday caravans are intended for leisure use and are only occupied for part of a year. Thus they are to be differentiated from residential mobile homes where people may live permanently. The Mobile Homes Act 1983 does not apply to holiday caravan parks.

The British Holiday and Home Parks Association and the National Caravan Council Limited have jointly published the Code of Practice for Selling and Siting holiday caravans. I shall refer to this as “the Code”. The Code includes the following provisions:

“8.

Anyone who has purchased a new Caravan shall be given a Licence Agreement which runs for a Licence Period of not less than ten years from the date of First Purchase. However for each year in which any Hiring takes place the Licence Period shall reduce by one year.

In the case of a used Caravan being sold by the Park Owner he shall give the Caravan Owner a Licence Agreement for a Licence Period being not less than the balance of the period of ten years referred to in the previous paragraph.

….

14.

The Park Owner shall give the Caravan Owner at least three months notification of an increase in pitch fees. Normally pitch fees will increase in line with changes in the cost of living or to cover cost of improvements on the Park.

15.

Where an increase in pitch fees is proposed the Park Owner shall give the Caravan Owner an explanation in writing of the reasons for the proposed increase.

16.

If not less than 51% of all Caravan Owners on the Park affected by the increase object in writing then the matter shall be referred to the special arbitration scheme for pitch fee disputes.

17.

The Park Owner may pass on to Caravan Owners as appropriate any charges which are not within the control of the Park Owner such as rates, water charges and other charges paid to third parties. Statutory charges will be in accordance with relevant legislation.

….

27.

A Licence Agreement issued in accordance with the Code shall include as a minimum, the following:

…

s)

Independent non-exclusive arrangements for disputes to be subject to arbitration (subject to limits on the pecuniary value of the matter in dispute).”

Clause 28 of the Code sets out a complaints procedure. This provides for arbitration as a last resort, if any dispute cannot be resolved by negotiation or conciliation.

I shall refer to the Unfair Terms in Consumer Contracts Regulations 1999 as “the 1999 Regulations.” The 1999 Regulations apply to a wide variety of consumer contracts. They require that the terms of such contracts should be fair and that they should be clearly expressed. There is no dispute that the 1999 Regulations apply to licence agreements which are made between caravan owners and the owners of leisure parks where caravans are sited.

The 1999 Regulations include the following provisions:

“Unfair Terms

5.

(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.

(2)

A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

(3)

Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

(4)

It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.

(5)

Schedule 2 to these Regulations contains an indicative and non-exhaustive list of the terms which may be regarded as unfair.

…

Assessment of unfair terms

6.

(1) Without prejudice to regulation 12, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.

(2)

In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate –

(a)

to the definition of the main subject matter of the contract, or

(b)

to the adequacy of the price or remuneration, as against the goods or services supplied in exchange.

Written contracts

7.

(1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.

(2)

If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail but this rule shall not apply in proceedings brought under regulation 12.

Effect of unfair term

8.

(1) An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.

(2)

The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term.”

Schedule 2 to the 1999 Regulations provides:

“INDICATIVE AND NON-EXHAUSTIVE LIST OF TERMS WHICH MAY BE REGARDED AS UNFAIR

1.

Terms which have the object or effect of –

….

(i)

irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;

(j)

enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;

(k)

enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided;

(l)

providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded;

….

(q)

excluding or hindering the consumer’s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.

“2.

Scope of paragraphs 1(g), (j) and (l)

….

(d)

Paragraph 1(l) is without hindrance to price indexation clauses, where lawful, provided that the method by which prices vary is explicitly described.”

Section 91 of the Arbitration Act 1996 supplements paragraph 1(q) of schedule 2 to the 1999 Regulations. It provides:

“91.

Arbitration agreement unfair where modest amount sought.

(1)

A term which constitutes an arbitration agreement is unfair for the purposes of the Regulations so far as it relates to a claim for a pecuniary remedy which does not exceed the amount specified by order for the purposes of this section.”

By the Unfair Arbitration Agreements (Specified Amount) Order 1999 the limit referred to in section 91 of the Arbitration Act 1996 is five thousand pounds.

The operation of leisure parks on which holiday caravans stand is a substantial business operation. One of the firms which offers professional advice in this field is Humberts Leisure, to which I shall refer as “Humberts”.

After these introductory remarks, I must now turn to the facts.

The defendant owns and operates a holiday caravan park in South Glamorgan, known as Fontygary Leisure Park. Caravan owners are not permitted to live permanently on site. They can only occupy their caravans between 1^st March and 5^th January in the following year.

The system on this park is that each caravan owner has a licence to place his caravan on a designated pitch and an entitlement to use the communal facilities of the park. In return the caravan owner pays a pitch fee which is reviewable every year.

In 2006 there were 494 pitches on the park. Some were in much more desirable locations than others, for example because they commanded a full view of the sea. Despite that circumstance all caravan owners paid the same pitch fee. That fact was the source of some discontent among those whose caravans were in less favourable locations. In 2006 the uniform pitch fee which was paid by all caravan owners was £1,692.

In July 2006 the claimant purchased an almost new Cosalt Studio caravan which stood in Fontygary Leisure Park on pitch WA27. The purchase price was £36,500. At the same time the claimant entered into a licence agreement with the defendant, which ran for ten years from 1^st March 2006. The licence agreement included the following provisions:

“1.

This agreement permits you to station a caravan on a park and to occupy it for holiday and recreational purposes. It complies with the Code of Practice for Selling and Siting Holiday Caravans issued by the British Holiday & Home Parks Association and the National Caravan Council and is the Licence Agreement referred to in that Code.

….

7.

Review of Pitch Fees

a.

On the Review Date we are entitled to review the Pitch Fee. We must give you at least three months’ notice in writing before the Review Date of an increase in the Pitch Fee.

b.

We will give you a written explanation of the reasons for any increase which is proposed.

c.

If not less than 51% of the owners of caravans affected by a proposed increase object to us in writing the parties will together take steps to have the reviewed fee determined by a special arbitrator scheme relating only to the review of the annual Pitch Fee. Otherwise the proposed reviewed Pitch Fee will become payable with effect from the Review Date.

d.

The Pitch Fee will be reviewed (by us or the arbitrator/arbiter) having regard to the following criteria:

i)

We are entitled to pass on to you as appropriate any charges which are not within our control such as rates, water charges and other charges paid to third parties.

ii)

Any changes in the cost of living as shown by the General Index of Retail Prices or another index having a similar purpose.

iii)

Sums spent by us on the Park and/or its facilities.

iv)

Changes in the cost of salaries and wages which we have to pay our staff.

v)

Changes in the length of the Season.

vi)

Any other relevant factor.

….

14.

The Agreement provides for disputes to be resolved by the following means:

a.

We may refer any dispute to an arbitrator as an alternative to going to Court.

b.

Any dispute relating to the amount of the pitch fee has to be referred to an arbitrator because the Court does not have power to fix the pitch fee.”

Clause 9 of the licence agreement provided that the claimant could terminate the agreement by giving notice in writing. Clause 10 provided that the defendant could terminate the agreement if the claimant was in serious breach of contract.

In 2007 the pitch fee payable by all caravan owners was increased to £1,895. The claimant duly paid that fee.

During 2007 the defendant took professional advice concerning the manner in which pitch fees were assessed. In a report dated 3^rd April 2007 Humberts recommended that pitches should be graded accorded to quality of location and size of pitch. In section 5 of its report Humberts wrote as follows:

“The traditional approach to holiday static parks was to let each static pitch on the same annual fee irrespective of size and location within the park. This arose primarily from ease of management and also the argument that the proprietors’ reflected the different quality of pitches by differentiating prices of caravans sold.

This approach has changed significantly over the last 10 years or so and a more forensic property type approach is now more common where various areas of the park are graded. Thus for an example the front row of caravans with a sea view attract a higher pitch fee than the rear caravans. This comparatively recent innovation has also arisen as a result of differentials in size of pitch as caravans have become larger and also reflect location.”

The defendant decided that it would introduce grading of pitches at Fontygary Leisure Park in 2008. The defendant notified all caravan owners of this decision by means of a circular letter sent out in mid-June 2007. That letter contained the following passage:

“Graded Pitches and Pitch Fees

Because Fontygary has been significantly upgraded in recent years we have taken specialist advice as to whether or not we have the correct fee structures when compared to the remainder of the industry. The advice was that we should grade our pitches and that in terms of fees, our best pitches are some 40% (£800-£900!) lower than charges at comparable parks.

Firstly may I reassure you that we have no intention of adding 40% to the fees. That having been said we must go some way to redressing the balance given the recent and planned investment at Fontygary. Secondly we do intend as from January 2008 to grade all pitches from 1-4.

You will be informed in July as to which grade your pitch will be and also what the fees will be for 2008. Although the calculations have yet to take place we would expect that the rise in fees for grade 4 pitches would be less than 5% whereas the fees for top pitches may rise between 20 and 25%.

We understand that this may be very bad news for some and therefore we will, at our expense, move your caravan should you wish to be sited on a lower grade pitch as long as the move takes place prior to 31 December 2007 and as long as suitable pitches are available.”

On the 3^rd August 2007 Mr. Tim McIlveen, the Managing Director of the defendant, wrote to all residents setting out the new pitch fees to be introduced in 2008. That letter contained the following passage:

“BACKGROUND Many of you have commented over the years that having the same fee for all pitches was unfair, particularly to those who have caravans sited on pitches with particular disadvantages. We have therefore decided to introduce a new fee structure based on four grades. Due to this change and because of recent improvements to Fontygary we have sought the assistance of 'Humberts Leisure' to give us an idea as to what our fee structure should be in comparison with others in the industry. Humberts are well respected chartered surveyors who are international leisure business consultants and one of their specialisations is Caravan Parks.

PITCH FEES 2008 In setting the fees for 2008 we have taken some notice of the advice from Humberts and as usual we have to take into account rising inflation, the effects of the minimum wage and of course higher interest rates and costs associated with our new site licence. In order to be as transparent as possible I will give you all the figures for all 4 grades and the figures suggested by Humberts. I hope you will then conclude that we have been as fair as possible given all the circumstances. Any owner who wishes to take advantage- of our previous offer of a free pitch move to a lower grade pitch still stands.

PITCH FEES FOR 2008 WILL BE: (Humberts suggested fees in brackets)”

	Grade 1	Grade 2	Grade 3	Grade 4
Pitch Fee	£2160.00 (£2750.00)	£2075.00 (£2300.00)	£2008.00 (£2100.00)	£1900.00 (£1900.00)

By reference to the classification in that letter 417 pitches fell within grade 1 or grade 2; 72 pitches fell within grade 3; 6 pitches fell within grade 4. The claimant’s pitch was classified as grade 1. Accordingly she was required to pay a revised pitch fee of £2,160 in respect of the year 2008.

Much argument followed in correspondence, which I need not traverse. The claimant was unable to institute an arbitration under the licence agreement, because she did not have the support of 51% of the other caravan owners who were affected by the increase. The upshot was that for the year 2008 the claimant paid the first instalment of the revised pitch fee, but she refused to pay the balance. On 29^th May 2008 the defendant served notice terminating the claimant’s licence agreement pursuant to clause 10.

Following termination the defendant offered to buy back the claimant’s caravan for £16,000. The defendant rejected that offer. Instead she removed the caravan from the park and sold it to a trader for £14,000.

As can be seen from the above facts, the claimant suffered a substantial loss as a result of owning a caravan on Fontygary Leisure Park for two years. The claimant attributed her losses to breaches of contract by the defendant. Accordingly, in order to recoup her losses, the claimant commenced the present proceedings.

By a claim form issued in Newport County Court on 22^nd April 2010 the claimant claimed damages for breach of contract, fraud, harassment and breach of trust. On 3^rd August 2010 District Judge Wilson-Williams summarily dismissed a number of claims which were hopeless, but allowed the action suitably slimmed down, to proceed as a claim for damages for wrongful termination of contract.

The action came on for trial before His Honour Judge John in March 2011. The claimant appeared as litigant in person. The defendant was represented by counsel, Ms. Bridget Forster.

The judge delivered judgment on 25^th March 2011. By that judgment the judge held that the defendant had been entitled to raise the claimant’s pitch fee to £2,160 for the year 2008. He rejected the claimant’s argument that, in reviewing the pitch fees, the defendant had taken into account other factors beyond those specified in clause 7 (d) of the licence agreement. The judge also rejected the claimant’s argument that the provisions of clause 7 of the licence agreement were “unfair terms”, as defined in the 1999 Regulations.

Accordingly the judge held that the Claimant’s failure to pay the full pitch fee was a breach of contract, which entitled the defendant to terminate the licence agreement. In the result, therefore, the judge dismissed the claimant’s claim for wrongful termination of the agreement.

The claimant was aggrieved by the judge’s rejection of her claim. Accordingly she has appealed to the Court of Appeal.

By an appellant’s notice dated 19^th April 2011 the claimant appealed against the judge’s decision on a variety of grounds. In due course counsel instructed by the Bar Pro Bono unit, Mr. Charles Taylor and Mr. Christopher Brookes, took over the conduct of the claimant’s appeal and, very sensibly, concentrated on her properly arguable points. The defendant has continued to be represented on the appeal by Ms. Forster.

The claimant’s grounds of appeal as finally presented to the Court of Appeal may be summarised as follows:

If any of those three arguments succeeds, it will follow that the judge’s decision must be reversed and the claimant will succeed in her claim for wrongful termination.

I shall therefore address the issues in the order set out above, starting with the interpretation of clause 7 (d).

The claimant contends in this court, as she did below, that the last (seventh) limb of clause 7 (d) must be narrowly construed. The first five limbs of clause 7 (d) all relate to costs which the defendant incurs in operating the park. Therefore, applying the ejusdem generis rule, only factors of the same character can fall within the sixth and seventh limb, despite the wide words used.

The judge did not accept that argument. In paragraph 28 of his judgment he held as follows:

“In my view, the words “Any other relevant factor” are plain. “Relevant” means relevant to the review of the pitch fee. Operational costs would clearly be relevant. So, too, might other factors such as the upgrading of the park and its enhanced status. That may be addressed if direct costs are passed on but not necessarily so. It depends on the historical circumstances and how it is that the development has occurred and what the former fee structure was. The phrase means a factor which is not one of the specific matters identified but which is relevant to the review of the fee and what the pitch fee should be. ”

I agree with the judge’s analysis. The first five limbs of clause 7 (d) all comprise factors which are relevant to the review of the pitch fee. The natural meaning of the final limb is any other factor which is also relevant to the review of the pitch fee.

Our attention has been drawn to the Court of Appeal’s decision in Stroud v Weir Associates Ltd (1987) 19 HLR 151. That case concerned the review of pitch fees on a residential caravan site. The agreement between the site owner and the caravan owners specified matters to be taken into account on the review as follows:

“(i)

the Index of Retail Prices

(ii)

sums expended by the owner for the benefit of the occupiers of mobile homes on the park

(iii)

any other relevant factors including the effect of legislation applicable to the operation of the park.”

O’Connor LJ, with whom Lloyd and Glidewell LJJ agreed, held that evidence of pitch fees at other caravan sites did not fall within sub-paragraph (iii) of the review clause. This was because the phrase “applicable to the operation of the park” qualified the term “any other relevant factor”. Thus the court favoured a fairly narrow interpretation of sub-paragraph (iii) in that case.

In the present case, by contrast, the phrase “any other relevant factor” is not qualified by any subsequent limiting words. I see no reason to restrict the effect of that provision to anything less than the natural and obvious meaning of the words in the context where they appear. Neither the contra proferentem rule nor regulation 7 (2) of the 1999 Regulations (upon both of which the claimant relies) affect the position. This is because there is no ambiguity in the phrase under consideration.

The matters which the defendant took into account when reviewing the pitch fee for 2008 comprised the costs increases of running the park and the factors set out in Humberts’ report. In my view, those matters were all relevant to reviewing the pitch fee. The principal factor identified in Humberts’ report which led to an increase in the claimant’s pitch fee was the introduction of grading. The considerations which led to the introduction of grading were plainly relevant to the review of pitch fees. It is hardly surprising that caravan owners whose pitches were smaller or in less desirable locations (for example, close to the lavatory block) objected to the system of uniform pitch fees. Furthermore, the quality of the location and the size of the pitch are obviously relevant factors to the consideration of what should be paid for that pitch.

Let me now draw the threads together. I reject the narrow interpretation of clause 7 (d) for which the claimant contends. In my view all of the factors which the defendant took into account when setting the pitch fees for 2008 fell within the ambit of clause 7 (d) of the licence agreement. The next question which arises, therefore, against the background of this interpretation of clause 7 (d), is the impact of the 1999 Regulations.

I have set out the relevant regulations in Part 1 above. Under regulation 5 a term is regarded as “unfair” if it causes a significant imbalance in the parties’ rights and obligations, to the detriment of the consumer. Schedule 2 to the regulations sets out an indicative list of some terms which may be regarded as unfair.

The effect of regulations similar to the 1999 Regulations was considered by the House of Lords in some detail in Director General of Fair Trading v First National Bank PLC [2001] UKHL 52, [2002] 1 AC 481. Lord Bingham, who delivered the leading speech, gave the following helpful exposition of the regulations at paragraph 17:

“A term falling within the scope of the Regulations is unfair if it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer in a manner or to an extent which is contrary to the requirement of good faith. The requirement of significant imbalance is met if a term is so weighted in favour of the supplier as to tilt the parties’ rights and obligations under the contract significantly in his favour. This may be by the granting to the supplier of a beneficial option or discretion or power, or by the imposing on the consumer of a disadvantageous burden or risk or duty. The illustrative terms set out in Schedule 3 to the Regulations provide very good examples of terms which may be regarded as unfair; whether a given term is or is not to be so regarded depends on whether it causes a significant imbalance in the parties’ rights and obligations under the contract. This involves looking at the contract as a whole. But the imbalance must be to the detriment of the consumer; a significant imbalance to the detriment of the supplier, assumed to be the stronger party, is not a mischief which the Regulations seek to address. The requirement of good faith in this context is one of fair and open dealing. Openness requires that the terms should be expressed fully, clearly and legibly, containing no concealed pitfalls or traps. Appropriate prominence should be given to terms which might operate disadvantageously to the customer. Fair dealing requires that a supplier should not, whether deliberately or unconsciously, take advantage of the consumer’s necessity, indigence, lack of experience, unfamiliarity with the subject matter of the contract, weak bargaining position or any other factor listed in or analogous to those listed in Schedule 2 to the Regulations. Good faith in this context is not an artificial or technical concept; nor, since Lord Mansfield was its champion, is it a concept wholly unfamiliar to British lawyers. It looks to good standards of commercial morality and practice. Regulation 4 (1) lays down a composite test, covering both the making and the substance of the contract, and must be applied bearing clearly in mind the objective which the Regulations are designed to promote.”

Schedule 3 referred to in that passage has now become schedule 2 in the 1999 Regulations. Regulation 4 (1) in that passage has now become regulation 5 (1) in the 1999 Regulations.

Bearing in mind the guidance given by the House of Lords in Director of Fair Trading, I must now consider the impact of the 1999 Regulations upon clause 7 (d) in the present case.

The claimant's first argument is that she paid an enhanced price for her caravan to reflect the size and quality of the pitch, and that she would have paid less if the pitch fee had been graded, so as to be higher for a grade 1 pitch, at the time of her purchase. There is, however, no evidence about what (if any) additional element of purchase price the claimant paid to reflect the size and quality of the pitch. The judge made no findings of fact about any additional element of the purchase price attributable to that matter. The claimant paid for and acquired an almost new luxury caravan. She did not purchase the pitch. The claimant’s entitlement to use the pitch would be based upon her payment of annually reviewable pitch fees.

I must next look at clause 7 (d) more broadly and in its context to see whether the defendant’s power to review pitch fees created an imbalance in the parties’ rights and obligations to the detriment of the claimant. I conclude that it did not create such an imbalance. I reach this conclusion for three reasons.

First, clause 7 (d) is part of a carefully balanced review procedure. Clause 7 (a) requires the defendant to give three months notice of any increase. Clause 7 (b) requires the defendant to give a clear explanation of the reasons for any increase. Clause 7 (d) prevents arbitrary increases being made, for example for the purpose of increasing the defendant’s profits or funding activities unrelated to the leisure park. In reviewing the pitch fee the defendant can only take into account factors which are relevant to that exercise.

Secondly, although the arbitration provision in clause 7 (c) only applies where 51% of caravan owners affected object to an increase, any individual caravan owner can challenge the legality of an increase in the courts, as indeed is happening in the present case. If the reasons for the increase stray beyond those permitted under clause 7 (d), then the court will not enforce payment of the revised pitch fee.

Thirdly, clause 7 (d) does not, in my view, fall within schedule 2 to the regulations paragraphs 1 (i), (j), (k) or (l), those being the provisions upon which the claimant relies. As to paragraph 1 (i) the claimant had a proper opportunity to become acquainted with the terms of the licence agreement before she entered into it. As to paragraph 1 (j) of schedule 2, clause 7 did not enable the defendant to alter the terms of the licence agreement unilaterally without a valid reason which was specified in the contract. As to paragraph 1 (k) of schedule 2, the defendant did not alter the characteristics of the service which it provided. As to paragraph 1 (l) of Schedule 2, the licence agreement gave the claimant the right to terminate if she found the pitch fee to be unacceptable. Also the entitlement of the defendant to raise the pitch fee was constrained by the provisions of clause 7 (d) of the licence agreement. The method by which the pitch fee would be varied was “explicitly described”, as required by paragraph 2 (d) of schedule 2 to the 1999 Regulations.

It should also be noted that the introduction of grading at Fontygary Leisure Park in 2008 was carried out in a fair manner. The defendant offered, at its own expense, to move caravans to less expensive pitches if any caravan owners so requested: see Part 2 above.

I therefore come to the following conclusions. The 1999 Regulations are applicable to the licence agreement in the present case. However, when tested against the criteria set out in those regulations, clause 7 is a fair term. Accordingly, I reject this element of the claimant’s appeal.

In those circumstances, all that remains to be considered is the effect of the arbitration provisions in the licence agreement.

The first issue which arises is whether the claimant had a right to take the dispute about her pitch fee to arbitration and whether she was wrongfully shut out from exercising that right.

On reading together clauses 7 (c) and 14 of the licence agreement, it is clear that an individual caravan owner could not refer the amount of the pitch fee to arbitration. Such an arbitration could only take place, if it was requested by 51% of caravan owners affected by the increase.

I can see the good sense of permitting arbitration only if it was requested by a substantial body of caravan owners. Pitch fees had to be set consistently for the whole park. It would not be practicable to administer the leisure park if pitch fees were negotiated or determined on an individual basis. Against that background, it would not make sense for the pitch fees for different caravans to be the subject of a series of separate arbitrations. Furthermore, as mentioned in Part 6 above, even though the individual caravan owners do not have the right to arbitrate, they still have the right to challenge in court any fee increases which go beyond the constraints of clause 7 (d).

I therefore come to the conclusion that the arbitration provisions of the licence agreement are “fair” within the 1999 Regulations.

The claimant raises a separate argument concerning the arbitration provisions in the Code. She submits that paragraph 28 of the Code gives individual caravan owners the right to arbitrate about pitch fee increases. I do not agree. Paragraph 16 of the Code limits the right to arbitrate in respect of pitch fee increases to cases in which 51% of the caravan owners affected object. The arbitration provisions of paragraph 28 relate to disputes other than disputes about pitch fees. This is the only way in which paragraphs 16 and 28 of the Code can be read consistently with one another.

Although not strictly relevant, I should add that in my view the Code is not incorporated into the licence agreement. The correct analysis is this. The defendant, no doubt like other operators of leisure parks, has signed up to the Code. Pursuant to its obligations under paragraph 8 of the Code the defendant has issued to all caravan owners a licence agreement which conforms to the requirements of the Code. If any material discrepancy existed between the terms of the licence agreement and the requirements of the Code, that may be highly material to the issue of fairness. However, no such discrepancy has been identified in the present case.

It follows from the foregoing analysis that the claimant cannot rely upon section 91 of the Arbitration Act 1996 (set out in Part 1 above) to establish unfairness. The overall result therefore is that the claimant has not been wrongfully denied any right to arbitrate about the level of her pitch fee.

For the reasons set out in Parts 5, 6 and 7 above, I cannot accept any of the claimant’s grounds for attacking the decision of the judge. The consequence therefore is that the claimant’s licence agreement was lawfully terminated.

In the result, if my Lords agree, the claimant’s claim for wrongful termination fails and this appeal must be dismissed.

I agree.

I also agree.