Since our last blog on rents under the new Electronic Communications Code, a further five decisions from the Upper Tribunal in England, covering a wide range of issues, have shed light on the operation of the new Code.
This blog looks at three particular issues considered by the Courts.
CTIL v Keast – Swiss Cheese or Cheddar? rights over an occupied site
One of the more unusual arguments considered by the Court, this case concerned an application by CTIL for Code rights in an existing mast site owned by Keast.
The Code prevents operators acquiring rights against each other by providing that Code rights can only be obtained over “land” and that, for the purposes of the Code, “‘land’ does not include electronic communications apparatus”.
Keast argued that, as there was an existing Vodafone mast and ancillary apparatus on the land, CTIL could only obtain Code rights over as much of the three dimensional space as was not occupied by the existing apparatus (including the concrete bases): a “Swiss cheese” with the holes being shaped by the apparatus.
CTIL of course wanted “Cheddar” and argued that it would be absurd if Code rights could not be obtained over land simply because of existing apparatus.
The Tribunal agreed with CTIL and held that the prohibition against acquiring rights in apparatus does not prevent the acquisition of Code rights in land where apparatus is present.
CTIL v Compton Beauchamp Estates Ltd – a different outcome for an occupied site
A similar situation to Keast where CTIL sought Code rights in an existing mast site occupied by Vodafone.
The Tribunal had to consider whether or not Code rights could be imposed on the owner, Compton Beauchamp, whilst it was not in occupation. Code rights can only be conferred on an operator by the occupier of the land and, as the land was occupied by Vodafone at the time, the Tribunal concluded that the owner was not in a position to confer the Code rights on CTIL and therefore dismissed their application.
The Tribunal indicated that the problem could have been overcome with Vodafone’s cooperation, but the agreement sought by CTIL said nothing about Vodafone. It did not provide for Vodafone to join as a party to surrender its tenancy or to acknowledge that it had no such right.
Whilst this case was decided in favour of the owner, it is clear that the outcome would have been different had it been approached in a different manner.
EE Ltd and Hutchison 3G UK Ltd v Trustees of the Meyrick 1968 Combined Trust of Meyrick Estate Management – intention to redevelop
One of the grounds to resist the imposition of Code rights is where the Court is satisfied that the owner “intends to redevelop all or part of the land to which the code right would relate, or any neighbouring land, and could not reasonably do so if the order were made”.
The operators in this case had existing apparatus installed on four masts under leases which expired before the new Code came into effect.
The redevelopment defence is intended to cover the situation where the landowner has genuine plans for redevelopment (e.g. a new housing development) and should not be prevented from doing so by being forced to have a mast or other communications apparatus on the site.
This case was not, however, a typical redevelopment scenario as the redevelopment proposed here was a proposal by the owners to put up their own masts, in place of the operators’. As noted above, Code rights cannot be obtained over electronic communications apparatus as it is excluded from the definition of “land”. If the owners had their own masts, this would allow them to charge the operators higher rents to use the masts, as the valuation provisions under the Code would not apply.
To meet the redevelopment test, the owners had to establish that they had both a reasonable prospect of carrying out their redevelopment and a firm, settled and unconditional intention to do so.
The Tribunal was satisfied that the first limb of the two part test was met. With planning permission granted and substantial resources, the owners had a reasonable prospect of being able to bring about their redevelopment.
However, on the second limb of the test, the owners failed. The Tribunal concluded that, in reality, the redevelopment plans were conceived in order to defeat the operators’ claim for Code rights.
The decisions coming through the Courts remain weighted in favour of the operators. Even Compton Beauchamp, which was decided in favour of the owner based on the circumstances put before the court, provides little encouragement to property owners seeking to resist the imposition of Code rights.
On September 3, 2019