No lockdown for the Telecoms Code

Posted: 08/09/2020

Since June, there have been no fewer than six decisions on the Electronic Communications Code. Plainly, members of the Upper Tribunal (Lands Chamber) (referred to in this article as ‘the UT’) – and their counterparts at the Lands Tribunal for Scotland – have been working briskly notwithstanding lockdown. Decisions concerning Scotland include Arqiva v Kingsbeck Ltd (LTS/ECC/2019/005), Cornerstone Telecommunications Infrastructure Ltd v Fotheringham (LTS/EEC/2020/007) and BT Plc v Morrison (LTS/EEC/2020/18), the latter concerning a colourful set of events relating to an operator’s cabinet and one landowner’s attempt to exercise a lien over it, strangely enough, in an effort to have it removed. On 1 September 2020, the UT handed down judgment in Cornerstone Telecommunications Infrastructure Ltd v University of the Arts London. The decision runs to an extensive fifty-odd pages, further commentary on which will follow at a later date.

A cautionary tale

In EE Ltd and another v Cooper and another [2020] UKUT 214 (LC), the operator sought rights to survey pursuant to paragraph 26 of the code, and concluded that the relevant land was unoccupied. The UT held that just two attempts to raise an owner by knocking on the door, was, in the circumstances, completely inadequate. The landowner avoided having an agreement to survey imposed on him – and indeed any costs at all – by doing absolutely nothing.

Remote justice

Arqiva Services Ltd v AP Wireless II (UK) Ltd [2020] UKUT 195 (LC); [2020] PLSCS 127 was apparently the tribunal’s first remotely heard trial, on 30 April and 1 May. The UT determined two preliminary issues, holding that, at the time the code came into force, the operator was occupying under a tenancy at will, based on an agreement reached on the expiry of the fixed-term, contracted-out lease. This was found not to be a subsisting agreement for the purposes of the transitional provisions, because the ‘in writing’ requirement was not satisfied. Further, the UT held that it was bound by the decision of the Court of Appeal in Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2019] EWCA Civ 1755; [2019] PLSCS 201 in relation to the narrow interpretation taken of paragraph 20, namely, that an order can only be imposed on someone in occupation of the land; thus it is not available for an operator already in situ. It made no difference whether or not an application was also made under paragraph 27 of the code, which concerns temporary rights. The operator was therefore left without a means by which it could obtain new rights.

Business tenancies and the code

Vodafone Ltd v Hanover Capital Ltd [2020] EW Misc 18 (CC); [2020] PLSCS 162 was decided by the deputy president of the UT, Martin Rodger QC, sitting as a judge of the county court, and dealt with the issues arising on application to renew a business tenancy, which would be one to which the code applied following renewal pursuant to section 43(4) of the Landlord and Tenant Act 1954 (the 1954 Act).

The case came about when Vodafone’s fixed term under the 1954 Act expired by effluxion of time, and it held over under a continuation tenancy pursuant to section 24 of the 1954 Act. The parties agreed that the continuation tenancy was a ‘subsisting agreement’ for the purposes of the transitional provisions. The landowner served an unopposed section 25 notice, and Vodafone issued proceedings for a new tenancy (of course, following Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd and another [2019] UKUT 338 (LC); [2020] EGLR 2, this was retrospectively proved to be the correct course of action) to obtain a new code agreement. The parties agreed terms to settle an application for interim rent.

The court considered the parties’ submissions on term and tenant’s break. The operator argued that there should be a rolling break clause exercisable on six months’ notice, as part and parcel of a three-year term. By contrast, the landowner contended that the term should be 10 years with a break after five years or on 12 months’ notice on the tenant losing its operator’s licence or the site becoming unsuitable for telecoms use.

The court determined that, in order to do justice to the parties, the term would be 10 years with a break after five, but would not be conditional on the tenant giving vacant possession. This was the court’s way of balancing the operator’s stated need for flexibility (particularly in light of pending appeals in both Compton Beauchamp and Ashloch, before the Supreme Court and Court of Appeal, respectively) against the ‘expensive and unwarranted distraction, hugely disproportionate to the very modest income’ the landowner would receive. Proof, if it was needed, that the UT appreciates quite how unwanted and expensive disputes can be for landowners.

In relation to rent, the court was forced to reconcile the ‘no scheme’ valuation approach, taken in respect of code agreements, with the approach contained in the 1954 Act, assuming an open market, willing lessee and willing lessor. The court contended that the correct approach in respect of this renewal was not simply ‘no scheme’, rather, on the analysis required, the court was obliged to factor in (by virtue of the ‘open market’ scenario) the potential competition between operators for the site, which would push consideration up. The result was that consideration was set at £5750, as compared to a pure ‘no scheme’ valuation for this site of £2250.

Following the decisions in Arqiva and, to a lesser extent, Hanover, the appellate decisions in Compton Beauchamp and Ashloch will be eagerly awaited.

This article was published in Estates Gazette in September 2020.

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