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Costs, conduct and clarity of approach in Code claims

Telecoms Mast with Satellite dishes Print publication

02/08/2019

Since its implementation in 2017, the new Electronic Communications Code (the Code) has generally made it easier for network operators to install and maintain apparatus in, over and under both private and public land. However, whilst reform was required to keep pace with technology, disputes between landowners and network operators are beginning to surface.  Two recent Code claims raise key points of which landowners, occupiers and telecoms operators should be aware.

Cornerstone Telecommunications v Central St Giles

In this case [1], the Upper Tribunal (Lands Chamber) (the Tribunal) took the opportunity to reinforce the importance of managing costs and to generally discourage “senseless disputes”.

An operator required access to the roof of a tenanted building which was thought to be a suitable site to host its electronic communications apparatus. Following extensive communications arising from the concerns of the landowner and tenant around the lack of detail provided about the apparatus proposed to be located on the site, an agreement was eventually reached allowing the required access.

The landowner and tenant ultimately complied with the operator’s original request, but spent significant time and money in doing so.

Equally, however, the operator had created uncertainty in refusing to specify any limits on the rights being sought.

Overall, the Tribunal considered that conduct on both sides was unhelpful and entirely disproportionate to the matter in hand. As such, notwithstanding that costs amounted to over £100,000, it awarded only the very much lower sum of £5,000.

EE and Hutchison v Meyrick

In the recent case of EE Ltd and Hutchison 3G UK v Meyrick 1968 Combined Trust of Meyrick Estate Management [2], the Tribunal considered a landowner’s attempt to avoid the imposition of Code rights.

A telecoms operator sought to acquire Code rights in relation to an existing mast site. The landowner sought to rely on paragraph 21(5) of the Code, adducing evidence of a proposed redevelopment to resist the imposition of Code rights. The landowner’s proposed redevelopment involved replacing the operator’s masts with taller masts, to install fixed wireless access broadband.  However the operator had confirmed that it would not attach antennae to the new masts and it was common ground that the redevelopment could not reasonably be carried out if the operator had Code rights.

The Tribunal stated: “Just as an important policy of the Landlord and Tenant Act 1954 is to confer a benefit on business tenants in the form of the new tenancy and the continuance of possession, the policy of the Code is to enable Code operators to acquire Code rights and to do so at a price calculated on the basis of assumptions that are favourable to them.”

Noting the similarities between the security of tenure regime under the Landlord and Tenant Act 1954 and the Code, the Tribunal applied the same principles and case law as apply in cases concerning that Act. It found that landowners can resist operators’ Code applications on the basis of paragraph 21(5) only if they can demonstrate both that they have a reasonable prospect of being able to carry out their redevelopment project (an objective test); and that they have a firm, settled and unconditional intention to do so (the subjective test) [3].

Assessing the landowner’s subjective intention, and taking into account matters such as the commercial sense and financial viability of the proposed scheme, the Tribunal concluded that, in reality, the redevelopment plans had been conceived only in order to defeat the claim for Code rights. The landowner was therefore given short shrift and the Tribunal confirmed:  “A redevelopment conceived purely to prevent the acquisition of Code rights, which the relevant person would not pursue if Code rights were not sought, will not satisfy the test in paragraph 21(5)[4].

WM comment and practical advice

These cases demonstrate to operators, landowners and tenants alike that disproportionate costs and sharp conduct will not be tolerated in Code disputes.

Wherever possible, therefore, parties should act in a spirit of cooperation and always consider whether there is the potential to negotiate solutions. Where cases do progress to litigation, parties should manage their costs so that they do not become disproportionate to the matters in dispute, and they should ensure that their conduct is, and is seen to be, beyond reproach.

As with Landlord and Tenant Act 1954 redevelopment disputes, landowners should ensure that they have solid evidence that their redevelopment plans are both objectively feasible and subjectively required.

In any event, the EE case will be welcomed by operators for the emphasis it places on the underlying intentions of the Code.  It should also be welcomed more widely for its clarification that established landlord and tenant law will apply and assist in the resolution of Code cases.

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[1] Cornerstone Telecommunications Infrastructure Limited v Central Saint Giles General Partner Limited & Anor [2019] UKUT 183
[2] [2019] UKUT 164 (LC)
[3] The Tribunal employed the two-stage test established by Cunliffe v Goodman [1950] 2 KB 237 and S Franses Ltd v Cavendish Hotel (London) Ltd [2018] UKSC 62.  See Walker Morris’ earlier briefing for further information on the Franses case.
[4] Ibid. paras 39 and 40

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