2019年6月13日

Case law update on the Electronic Communications Code

The basics of the Code

The previous legislation governing telecommunications leases was replaced by the Electronic Communications Code (the 'Code') as set out in Schedule 1 of the Digital Economy Act 2017 which came into force in December 2018.

The Code seeks to clarify the relationship between landowners and telecoms operators, as well as conferring certain rights on operators ('Code rights') such as to install and maintain apparatus in, on or under land and to carry out works to the land in connection with the apparatus; the rationale behind this legislation is to better facilitate network infrastructure throughout the UK.

Telecoms operators can acquire Code rights in one of two ways:

  • By written agreement under paragraph 9 of the Code.
  • By court order under paragraph 20 of the Code. This is triggered where an operator gives a landowner written notice that it seeks the landowner's agreement to Code rights and other terms set out in the notice. The operator may apply for a court order imposing an agreement if the landowner does not reply within 28 days of the notice being given, or if the landowner serves a counter-notice on the operator stating that it does not agree.

The second route is far reaching with obvious potential to concern landowners, such is its similarity to compulsory acquisition; the first cases on paragraph 20 of the Code have begun to be handed down and are providing some insight on how the tribunal is approaching the interpretation of the Code.

The recent cases

Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2019] UKUT 107 (LC)

The facts

Vodafone had been granted a 10 year telecommunications lease in 2004 relating to a telecoms mast and apparatus, and had remained in occupation of the land at the expiry of the term (under the protections provided by the Landlord and Tenant Act 1954).

Possession proceedings had been ongoing between the landowner and Vodafone after negotiations for a new lease had broken down. Cornerstone, a joint venture formed by Vodafone and Telefonica, had served a notice under paragraph 20 of the Code on the landowner (Compton Beauchamp Estate Ltd) requesting Code rights.

The decision

The tribunal had to decide whether it had jurisdiction to impose an agreement between the landowner and Cornerstone under paragraph 20 of the Code, when it was in fact a third party (Vodafone) that was in occupation of the land.

It was held that it did not; this was notwithstanding that Vodafone and Cornerstone were connected and that there was every reason to believe that Vodafone would cooperate in allowing Cornerstone to take up occupation of the site. It was noted by the judge that the Code is a complex piece of legislation and affects many landowners.

Cornerstone Telecommunications Infrastructure Limited v Keast [2019] UKUT 116 (LC)

The facts

Cornerstone featured again in this second case. Here they were seeking rights through paragraph 20 of the Code where Vodafone had been an existing tenant of a mast site.

The landowner (Keast) contended that as the extent of Code rights claimed under the paragraph 20 notice had been less than those claimed at the tribunal, this rendered the paragraph 20 notice invalid and that the proceedings should be struck out.

Keast also contended that under common law principles, the electronic communications apparatus on the site had become part of its freehold land because it was annexed to it.

The tribunal:

  • Held that the it cannot impose on landowners any Code rights that had not been claimed by the operator in a paragraph 20 notice; however, in this instance there had been no great difference between the rights sought by the operator under the paragraph 20 notice and their statement of claim.
  • Stated that it would be absurd if electronic communications apparatus were to become part of the landowner's land.
  • Held that there is no restriction on the terms which it may impose (under paragraph 23 of the Code); the tribunal will take into account the overall scheme of the Code and the need to be fair to both parties when considering what terms are appropriate.

Takeaway points for landowners

Compton Beauchamp Case

  • The decision itself and the tribunal's strict interpretation of the Code in this case is somewhat comforting to landowners. Paragraph 20 notices should be carefully considered in conjunction with the situation on the ground.
  • The tribunal did, however, leave it open as to whether the decision would have differed had Vodafone withdrawn their claim of entitlement to a periodic tenancy and given up its Code rights. Landowners should, therefore, have in mind the statutory protection afforded to operators in light of the trend towards operators consolidating sites via joint ventures when considering whether to monetise land through telecommunications leases; due regard should be had to future plans for the land. It remains to be seen how the tribunal will treat a joint venture application where an existing operator-occupier cedes its rights.

Keast Case

  • Landowners should give proper consideration to the rights sought by operators in paragraph 20 notices, especially if followed by an application for a court order where there is an attempt made to expand on those rights. Operators are, however, sophisticated and it is perhaps unlikely that such discrepancies will arise often in practice
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