AP Wireless II (UK) Ltd v on Tower (UK) Ltd

Hearing date: 15 July 2025

This judgment was handed down remotely at 10:00am on 25 July 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Sir Geoffrey Vos, MASTER OF THE ROLLS:

Introduction

This appeal centres on the proper interpretation and legal effect of a single clause in a written agreement dated 11 March 1997. This agreement was entered into between the owner of Fields Farm, Congleton Road, Sandbach and Orange Personal Communications Services Limited to install and maintain telecommunications equipment including a phone mast on a site on the owner's land (the Agreement).

Clause 2.1 (clause 2.1) of the Agreement provided as follows:

This Agreement shall come into effect on the date shown above and shall continue for no less than the Minimum Term [10 years from 11 March 1997]. It may be terminated by either party giving to the other not less than 12 months' notice in writing to expire at any time on or after the expiry of the Minimum Term.

Mr Justice Edwin Johnson (the judge) decided that the Agreement did not create a term certain. In those circumstances, he held that the tenancy purportedly created by the parties was void, and took effect as a licence. This was so notwithstanding that the other two requirements for a tenancy to exist, namely the payment of rent and exclusive possession, were present. The judge thought that his decision was compelled by the terms of clause 2.1 and the law, but that it was unsatisfactory (see the postscript to his judgment).

The owner (as appellant) advanced three arguments as to why the judge was wrong. Each had the conclusion that the Agreement ought to be regarded by the law as having created a term certain.

First, Baroness Hale had identified only two invalidating features at [93] of her judgment in Mexfield Housing Co-Operative Ltd v. Berrisford [2011] UKSC 52, [2012] 1 AC 955 ( Mexfield). Both those features were absent in this case: (i) here the term was not of uncertain duration as, for example, was a term meaning “for the duration of the war” in Lace v. Chantler [1944] KB 368; (ii) here there was no fetter of uncertain duration on either parties' right to serve notice as, for example, in Prudential Assurance Co Ltd v. London Residuary Body [1992] 2 AC 386 ( Prudential) where the tenancy was terminable on two months' notice but notice was not to be given until the land was required for road widening. I will call this the “invalidating features argument”.

Secondly, the owner argued that the Agreement itself created a valid term certain for a minimum term of 10 years, terminable by either party giving 12 months' notice expiring on any day after the minimum term. I will call this the “interpretation argument”.

Thirdly, the owner argued that, even if the Agreement was void for want of a certain term as the judge held, an annual periodic tenancy ought to have been inferred (as happened in Prudential), rather than defaulting to holding that the Agreement constituted a contractual licence. I will call this the “inferred periodic tenancy argument”.

If the owner is right, the Agreement will be regarded as creating a valid tenancy (or there will be an inferred periodic tenancy) which will be renewable under the terms of Part II of the Landlord and Tenant Act 1954, attracting a higher rent. If the owner is wrong, and the judge was right that the occupier holds only a contractual licence, that licence will be renewable under the terms of the Electronic Communications Code now contained in schedule 3A to the Communications Act 2003 (the Code), attracting a lower rent. Both parties accepted that our decision had consequences for numerous other agreements beyond the Agreement.

I have decided that all three of the owner's arguments are wrong, so this appeal should be dismissed. In relation to the invalidating features argument, Baroness Hale was not laying down any general rule at [93] of Mexfield. In relation to the interpretation argument, clause 2.1 is clear and unambiguous. It purports to create a term of 10 years that can be determined on any day on or after its 10 ^th anniversary on 12 months' notice given by either party. The length of the tenancy purportedly created could not be determined when the Agreement was entered into and was, therefore, uncertain and invalid. Thirdly, in relation to the inferred periodic tenancy argument, the judge was right to refuse to infer a periodic tenancy. Following the reasoning of the Supreme Court in Mexfield, allowing the terms of the Agreement to survive as a valid contractual licence best accords with what must be taken to have been the intentions of the parties from the terms of the Agreement.

With that introduction, I shall give my more detailed reasons under the following headings: (i) the relevant terms of the Agreement, (ii) the authorities in chronological order, and (iii) each of the three arguments I have already described.

The relevant terms of the Agreement

The Agreement was headed “Agreement for the Installation of PCN Equipment – Green Field”. It is also worth noting that neither the owner nor the occupier is an original party to the Agreement. Both are assignees.

Clause A provided that the owner was “entitled to a legal estate in the [Site]”, a provision which the owner points out would have been unnecessary if a licence had been intended. Clause C provided for the occupier to pay a “Tariff of £3,300 per annum exclusive of VAT”. Clause D provided for a “Minimum Term” of 10 years from 11 March 1997. The definition of Minimum Term in the attached terms and conditions said that it was the “period set out in Clause D above”.

Clause 2.2 of the (terms and conditions of) the Agreement provided that “[n]otwithstanding the provisions of clause 2.1, [the occupier] may terminate [the Agreement] at any time on not less than 3 months' prior written notice expiring on a Payment Day [defined as 31 March, 30 June, 30 September and 31 December]” if the Site was no longer suitable for the occupier's equipment.

Clause 3.1 provided that the Tariff was to be calculated from 14 August 1996 and was payable quarterly in advance on the Payment Days (as defined). Clause 9.1 provided for termination of the Agreement in the case of arrears of payments or other substantial breaches of the occupier's obligations. Clause 10.1 was relied upon particularly by the owner, since it recited that it was the intention of the parties that the Agreement should bind their successors in title.

A supplemental agreement dated 2 November 2000 between the original parties to the Agreement increased the Tariff to £5,000 from 2 November 2000.

The authorities in chronological order

Undoubtedly the two most relevant authorities to what we have to decide are Prudential and Mexfield. In deference to the fact that the parties and the judge referred to a range of other authorities, I shall mention some of them briefly in this section of my judgment.

In Re Threlfall (1880) 16 Ch D 274, a mortgage deed contained an attornment clause under which the mortgagor became a tenant to the mortgagee from year-to-year at a rent of £800 per annum payable quarterly. The mortgage could determine the tenancy without notice after the end of the first quarter. The Court of Appeal held that an annual periodic tenancy had indeed been created as the attornment clause provided, not a tenancy at will as contended for by the mortgagor.

In Lace v. Chantler, there was a sub-letting expressed by the following words in a rent book: “furnished for duration”. The tenant argued that the words meant that the property had been let to him for the duration of the war. The Court of Appeal upheld that claim, but held that such a tenancy was void as it was for an uncertain term. Lord Greene MR also refused at pages 371–2 to construe the agreement as either an agreement for a lease or a valid licence. He held that “[t]he intention was to create a tenancy and nothing else”.

In Amad v. Grant [1947] CLR 327, the High Court of Australia was construing a written tenancy agreement providing for “the weekly rent of £2 2s. 6d. payable in advance such tenancy to commence on [17 May 1937] and not cease … until one month's notice in writing shall have been given … and such tenancy to continue for the term of three years at the least”. The majority interpreted this agreement as a letting for a fixed term of three years followed by a monthly periodic tenancy (see Latham CJ at page 336). The owner suggested that this case was most like this one, but I do not agree. On the words used, there was clearly in that case a fixed term plus a continuing periodic tenancy. Indeed, the difference between the minority and the majority was only as to whether what followed the three-year fixed term was an annual or a monthly tenancy. In our case, as will appear, there was just a fixed term and a notice period.

Breams Property Investment Co. Limited v. Stroulger [1948] 2 KB 1 ( Breams) was another similar case. There was in that case an agreement for a periodic quarterly tenancy subject to a clause that provided that the landlord would...