Welcome to the latest Burges Salmon Electronic Communications Code Case Law Update. This quarterly newsletter will tell you all you need to know about the key cases involving the Code and why they are important.
After a quiet April and May, June was a busy month for all things Code-related, with two decisions from the Upper Tribunal and a Supreme Court decision relating to three cases all being made within the course of a week.
This edition contains:
- the outcome of the Supreme Court appeal;
- an update on the proposed changes to the Code;
- a cautionary tale on properly preparing an application for interim Code rights;
- a first of its kind decision on the removal of telecoms apparatus under the Code;
- consideration of the tricky issue of access to sites where liability to third parties is a concern; and
- confirmation that operators should generally pay landowners their reference costs in relation to agreed interim rights.
CTIL v Compton Beauchamp Estates Ltd (“Compton Beauchamp”)
CTIL v Ashloch Ltd and AP Wireless II (UK) Ltd (“Ashloch”)
On Tower UK Limited v AP Wireless II (UK) Ltd (“On Tower”)
22 June 2022
Key points:
- The Supreme Court has overturned the principle established by the Court of Appeal that an operator in occupation cannot apply for new code rights to be imposed. Operators making such an application are not to be considered “the occupier” for the purpose of Paragraph 9 of the Code and, on that basis, the operator can apply for additional rights under Paragraph 20 over and above those contained in the existing Code agreement.
- It also found that an operator occupying under a tenancy at will does have the right to apply for new Code rights under Paragraph 20, overturning the decision in the OnTower case.
- Where another operator is already in occupation, that operator will still be considered the occupier and Code rights should be sought from that occupier and not the landowner.
- Subsisting agreements protected by the Landlord and Tenant 1954 Act should still be renewed under the provisions of the 1954 Act and not through Part 5 of the Code.
The Supreme Court has handed down judgment in three joint appeals concerning the circumstances in which operators are entitled to apply to the Upper Tribunal to impose a new code agreement under Paragraph 20 of the Code.
The appeals concern the interpretation of Paragraph 9 of the Code, which provides that “A code right in respect of land may only be conferred on an operator by an agreement between the occupier of the land and the operator.”
This has been found to cause issues in three separate scenarios which resulted in Court or Upper Tribunal cases:
Scenario 1 (Compton Beauchamp) – New operator seeking rights when previous operator’s apparatus remains in situ
In Compton Beauchamp, the Upper Tribunal found that it did not have jurisdiction to impose Code rights on the landowner in favour of CTIL, because Vodafone already had apparatus in situ. Vodafone, rather than the landowner was therefore the “occupier” under Paragraph 9. The Court of Appeal upheld this decision.
Scenario 2 (Ashloch) – Operator in situ under continuing lease seeks new code rights under Paragraph 20
When upholding the decision in Compton Beauchamp, the Court of Appeal stated that the general rule was that an operator in occupation could not apply for new rights under Paragraph 20 (as they would be both the occupier and the operator).
In Ashloch, CTIL sought rights over a different site occupied by Vodafone. In order to avoid the issues experienced in Compton Beauchamp, it took an assignment of Vodafone’s lease, which was protected under the Landlord and Tenant Act 1954. It then served a Paragraph 20 notice and applied to the Upper Tribunal seeking a new Code agreement.
The Upper Tribunal again found that it did not have jurisdiction to impose code rights because of the general rule stated in the Court of Appeal’s decision in Compton Beauchamp.
The Court of Appeal upheld this decision and also found that, under the Code’s transitional provisions, an operator under a subsisting agreement had the right to renew that agreement under either Part 5 of the Code or under Part 2 of the 1954 Act but not both. In that case, as the relevant tenancy was protected by the 1954 Act, it had to be renewed under the 1954 Act.
Scenario 3 (OnTower) – Operator occupies under tenancy at will
In OnTower, the Tribunal reluctantly found that it did not have jurisdiction to impose Code rights in favour of an operator in occupation under a tenancy at will because such an agreement was not caught by the transitional provisions (as there was no written agreement) and the operator was in occupation.
The Tribunal reluctantly found that it was bound by the Court of Appeal’s findings in Compton Beauchamp and Ashloch. Accordingly, the operator could neither renew its Code agreement or impose a new one.
Supreme Court Decision
The Supreme Court rejected the Court of Appeal’s interpretation of Paragraph 9 of the Code and found that where an operator with equipment in situ requests Code rights under Paragraph 20 of the new Code, it is not to be regarded as the occupier of the site for the purposes of Paragraph 9.
This means that operators would be able to apply for additional Code rights to be imposed (dealing with the issues in Scenario 2 and 3).
However, the Supreme Court found that operators which were not applying for new rights were still to be considered as occupiers under Paragraph 9. Accordingly, the position under Scenario 1 remains unchanged.
Furthermore, the Supreme Court did not disturb the principle that a tenancy protected by the 1954 Act should be renewed pursuant to that Act and not through the Code. In that scenario, a Paragraph 20 application could only be made if new Code rights not granted by the prior agreement were required.
Conclusion
This decision offers welcome clarity to problematic and unclear aspects of the Code.
However, it must be pointed out that a number of these issues were already due to be resolved by the changes to Code to be introduced in the Product Security and Telecommunications Infrastructure Bill ('the Bill').
In its current form, the Bill includes a new Paragraph 9(2) which provides, that where land is occupied exclusively by an operator, Code Rights may be conferred on the operator by:
- the person exercising management or control over the land; or (if there is no such person)
- by a person whose interest in the land would be prejudicially affected by the exercise of the Code Rights.
On this basis, although the Supreme Court decision is significant (in particular in the way it looked to the policy objectives behind the Code for guidance on the meaning of the Code), it will effectively only fast forward some of the changes to be introduced by the new legislation.
EE Ltd v 100 Nox SARL– 17 May 2022
Key points:
- Operators should ensure they have properly prepared before seeking to impose interim Code rights including:
- Establishing who the occupier is and the best way to contact them;
- Ensuring that the Paragraph 26 Notice is properly addressed and actually received; and
- Providing sufficient detail of the proposed surveys to the Tribunal.
In this case, EE unsuccessfully sought interim Code rights to carry out an intrusive survey on a potential rooftop site.
EE wrote to the landlord of the building’s registered office in Luxembourg twice before serving a Paragraph 26 Notice, addressed to the wrong entity. As it received no response to the notice, EE commenced proceedings against the landowner. The landowner did not respond and did not attend the hearing. There was no evidence that the landowner had signed for any of the correspondence or notices. Whilst EE had filed a witness statement which incorrectly stated that the landowner had responded, this was later withdrawn.
The Tribunal accepted that the landowner had been correctly served with the notice and proceedings, but declined to exercise its discretion to grant the interim rights, as it appeared that EE had made no real effort to contact the landowner. The Tribunal suggested that EE’s representatives should have visited the site and ascertained how the occupiers of the building communicated with the landowner.
The Tribunal also considered that an overseas respondent might have disregarded a notice which was not clearly addressed to it, despite the inclusion of its name in the draft agreement.
The Tribunal was also not satisfied by EE’s efforts to ascertain whether the landowner was the occupier of the rooftop site. Whilst EE had checked a top floor lease and established that its demise did not include the rooftop, this was insufficient, as there were various other leases which might include parts of the site or easements over it. EE also did not appear to have considered who was occupying the stairs or lifts, which were needed to gain access to the site.
Finally, the Tribunal found that it had been provided with insufficient information about the intrusive surveys proposed to perform the balancing exercise set out in Paragraph 21 of the Code.
On Tower UK Limited v AP Wireless (II) UK Limited – 17 June 2022
Key points:
- In the absence of an express management function, landowners will generally not be liable for the safe operation of electronic communications sites on their land and accordingly are not entitled to insist on comprehensive safety provisions.
In this case, the operator had applied for new Code agreements for three sites provided by the landowner under Part 5 of the Code.
The landowner sought a number of provisions in the new leases intended to protect itself from liability, for the safety of the sites. It sought to limit the hours during which the operator could access the site and wanted them to provide the details of its activities on the site, including method statements and risk assessments for every visit and the identity and qualifications of everyone who attends.
The Tribunal noted that the Code did not envisage that a landowner would be responsible, for the safety of a telecommunications site on its land. The Code agreements would require the landowner to give up exclusive possession of the site, leaving them no control over what goes on there. Accordingly, liability under the Occupier’s Liability legislation would not apply.
Even where the landowner retained possession of the access way, it would not be liable for what happens on the way to the site if the Code agreement gives it no control over what the operator does on the access route.
The duty not to expose employees to risks under the Health and Safety at Work Act 1974 did not apply either, as activities on the site would not usually form part of the landowner’s undertaking. In the case of professional site providers for electronic communications, the risk of liability only applied to sites where they had a management function.
The Tribunal therefore found that there was no need for the landowner to insist on comprehensive safety and oversight measures.
Crawley Borough Council v (1) EE Limited (2) Hutchison 3G UK Limited – 20 June 2022
Key points:
- When the right to require the removal of electronic communications apparatus arises, the Tribunal does not have discretion as to whether to order removal of the apparatus.
In this case, the landowner successfully obtained an Order under Paragraph 37 of the Code for the removal of telecoms apparatus from its land, in what is understood to be the first ruling of its kind.
The operator had apparatus installed pursuant to a lease protected by the Landlord and Tenant Act 1954. The landowner served a Section 25 notice on the operator prior to expiry of the lease, terminating the lease and proposing terms for a new lease. The operator did not apply to the Court for a new lease within the statutory period and so lost its security of tenure under the 1954 Act.
Because it had been protected by the 1954 Act, Part 5 of the Code did not apply to the agreement. Paragraph 37(3)(d) gives a landowner a right to require the removal of apparatus where a lease to which Part 5 of the Code does not apply has come to an end or ceased to bind the landowner.
The landowner applied to the Tribunal requiring the removal of the apparatus within 6 months.
Because the operator was already in occupation, it could not impose new rights on the landowner (prior to the Supreme Court decision covered in this update). Therefore, the operator served a Paragraph 20 notice in relation to a nearby part of the same site.
The operator asked the Tribunal for a stay, pending the Supreme Court decision or the determination of its intended application under Paragraph 20 for rights over the nearby site.
The Tribunal found that it had no discretion as to whether to make an Order for removal, only discretion as to the date of removal, as the Code refers to the landowner having a “right to require removal”, with no caveats.
The Tribunal therefore refused to stay the claim and agreed to grant the Order that the apparatus be removed in 6 months’ time, finding that this was likely to be sufficient for the issues to be addressed.
Note that following the Supreme Court’s decision covered in this update, it may have been possible for the operator to have sought new code rights to replace the terminated 1954 Act lease. However, this would arguably put the operator into a better position than if it had renewed under the 1954 Act and it would be interesting to see how the Tribunal would deal with such an application.
EE Limited v HSBC Bank Plc – 4 July 2022
Key Points:
- Unless the parties have agreed to bear their own costs in an application for interim rights, the Tribunal is likely to direct that operators pay landowners’ costs of the reference.
This case concerned a reference under Paragraph 26, with the operator seeking interim rights to go on to land to undertake surveys. The parties had agreed all terms of the order, save for compensation and costs.
The Tribunal noted that whilst it was common for parties to submit an agreed form of order to the Tribunal to be made without a hearing and with each party bearing its own costs, the Tribunal had discretion over the costs of Paragraph 26 references. Where an order for costs was not agreed, the Tribunal’s usual order would be that the operator pay the landowner’s costs. This reflected the principle that incurring these costs was necessary because interim Code rights can only be imposed by order of the Tribunal. This approach was also consistent with practice in the context of compulsory acquisition.
A further consideration was that in this case the operator had issued the application without responding to a draft agreement proposed by the landowner.
The Tribunal therefore directed that the operator pay the landowner £15,000 in respect of its reference costs.
2017 Electronic Communications Code New Changes – What You Need to Know
On 24 November 2021, the Government published its response to the “Access to Land: consultation on changes for the Electronic Communications Code” (“the Consultation”) along with the initial draft of the Product Security and Telecommunications Infrastructure Bill (“the Bill”). Part 2 of the Bill provides for various modifications to be made to the 2017 Electronic Communications Code (“the Code”) and associated legislation.
The Bill has progressed through the House of Commons with only minor amendments and is currently at the House of Lords Committee Stage. It is anticipated that it will obtain Royal Assent in the coming months
The proposed changes are considered in more detail here.
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