Cornerstone Telecommunications Infrastructure Limited v Ashloch Limited (1) and AP Wireless II (UK) Limited [2021] EWCA Civ 90   

Following a bout of telecommunications cases considering the cross-over between the new Electronic Telecommunications Code (the Code) and the Landlord & Tenant Act 1954 (the 1954 Act), the Court of Appeal has now confirmed the renewal procedure for 1954 Act leases which are also subsisting telecommunications agreements.

Background

Pursuant to the transitional provisions of the Code, telecommunications operators occupying land pursuant to a lease that enjoys security of tenure under the 1954 Act are precluded from renewing under the Code. They must instead renew their leases under Part II of the 1954 Act, albeit once granted, the renewal lease would be a Code agreement if its primary purpose is to grant Code rights. 

At the time the new Code came into force (on 28 December 2017), the lease in this case continued under the 1954 Act. Despite occupying pursuant to a subsisting agreement, the operator, CTIL, gave notice for a new agreement to be granted in accordance with the Code.  However, the landowner argued that the only way CTIL could obtain new rights over the site was by following the renewal process in the 1954 Act, rather than that under the Code. 

At the Upper Tribunal hearing in 2019, it was held that CTIL could only renew in accordance with the 1954 Act. CTIL appealed.

Judgment

The Court of Appeal held that the Upper Tribunal has no jurisdiction under the Code to impose Code rights in favour of an operator who is already in occupation of land under a tenancy which:

• was granted before the Code came into force 
• is continuing under section 24 of the 1954 Act.

An operator with a 1954 Act tenancy must renew under the Act, but will thereafter be regarded as a Code agreement.

Lewison LJ acknowledged that some operators would be left out in the cold as consequence of the transitional provisions but noted that the statutory intention behind the Code was for it not to apply retrospectively to subsisting agreements. 

Our comment

This judgment provides significant advantages to landowners, who will be able to rely on the open market rent provisions of the 1954 Act, as opposed to the "no network" assumptions of the Code. We expect that operators are likely to seek as short a term as possible on any statutory renewals under the 1954 Act, so they can fall back on Code rights as soon as possible. 

The decision comes as the Department of Culture Media and Sport published a Consultation Paper on changes to the Code. to deal with the suggested problems generated by this case (which at the time of publication was an Upper Tribunal decision) along with the case of Compton Beauchamp, due to be heard later this year by the Supreme Court. Further changes are to be expected.