Cornerstone Telecommunications Infrastructure v Ashloch Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Davis,Lord Justice Lewison |
| Judgment Date | 29 January 2021 |
| Neutral Citation | [2021] EWCA Civ 90 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C3/2020/0107 |
[2021] EWCA Civ 90
Lord Justice Davis
Lord Justice Lewison
and
Lord Justice Arnold
Case No: C3/2020/0107
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL (LANDS CHAMBER)
Mr Martin Rodger QC
TCR/83/2018
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Jonathan Seitler QC & Mr Oliver Radley-Gardner (instructed by Gowling WLG (UK) LLP) for the Appellants
The 1 st Respondent was neither present nor represented
Mr Christopher Pymont QC & Mr Wayne Clark (instructed by Eversheds Sutherland International LLP) for the 2nd Respondent
Hearing dates: 19 th and 20 th January 2021
Approved Judgment
Introduction
The issue on this appeal is whether the Upper Tribunal (“the UT”) has jurisdiction under Part 4 of the Electronic Communications Code (“the Code”), which came into force on 28 December 2017, to impose Code rights over land in favour of an operator which is already in occupation of the same land under a tenancy granted before the Code came into force; and which is continuing after its contractual expiry date under section 24(1) of the Landlord and Tenant Act 1954. In more precise terms, the UT was answering a preliminary issue framed in the following terms:
“Whether the Tribunal has jurisdiction to impose a Code agreement pursuant to paragraph 20 of the Code in circumstances where there is an existing 1954 Act protected tenancy in place.”
In a careful, detailed and impressive decision, the UT (Martin Rodger QC, Deputy President) held that it did not. His decision is at [2019] UKUT 338 (LC), [2020] 1 P & CR 16. No wider question is directly raised by the preliminary issue.
Cornerstone Telecommunications Infrastructure Ltd (“Cornerstone”) is a joint venture formed by Vodafone Ltd and the Telefonica group of companies to own and manage a combined portfolio of telecommunications sites contributed by each of them. Cornerstone is an “operator” within the meaning of the Code. As the result of an assignment, Cornerstone is the tenant of part of the roof of a building called Windsor House in Birmingham. The tenancy is one that is protected by Part II of the Landlord and Tenant Act 1954. It was originally granted on 14 June 2002, before the Code came into force. Although its contractual term date has passed, it is common ground that the tenancy is continuing under section 24 of that Act. Necessarily, that means that Cornerstone is in occupation for the purpose of a business carried on by it. The immediate reversioner is a company abbreviated to APW, which specialises in the acquisition and management of leasehold telecommunications sites. The other respondent, which is the freeholder, has played no part in this appeal.
It is common ground that Cornerstone is entitled to apply to the court for the grant of a new tenancy under Part II of the 1954 Act. But Cornerstone says that it is more to its advantage to acquire rights under the Code as opposed to the 1954 Act; and that it is entitled to do so.
On 13 August 2019 Cornerstone gave notice to APW under paragraph 20 of the Code, calling on APW to enter into an agreement conferring Code rights upon it. Since no such agreement has been reached, Cornerstone has applied to the UT for the imposition of such an agreement under Part 4 of the Code. APW's position is that Part 4 of the Code is not available to Cornerstone because only the occupier can confer Code rights; and APW is not the occupier. Cornerstone is the occupier of the site. It says that the only way for Cornerstone to obtain new rights over the site is by means of an application to the County Court for a new tenancy under section 24(1) of the 1954 Act. The UT decided those issues in APW's favour.
The appeal turns partly on the transitional provisions contained in Schedule 2 to the Digital Economy Act 2017, which introduced the Code. But before examining those provisions, it is necessary to say something about the origins of the Code.
Origins of the Code
Since the nineteenth century there have been statutory provisions enabling providers of telecommunications (in essence telephones) to place apparatus on land. The provisions were amended from time to time in a rather piecemeal way culminating (before the introduction of the Code) in the code (“the old code”) contained in Schedule 2 to the Telecommunications Act 2003.
There was widespread dissatisfaction with the old code for a number of reasons. First, it was complex and extremely difficult to understand. Second, it was outdated. Third, there was evidence of concern that it was making the rollout of electronic communications equipment more difficult. In consequence, the government commissioned the Law Commission to report with recommendations for reform. The Commission's report (The Electronic Communications Code (Law Com 336)) was published in February 2013.
Under the old code, an agreement conferring a right was effective if the occupier of land agreed to it in writing (Telecommunications Act Sched 2, para 2 (1)); and the owner of the land (or a lessee of it), if not the occupier, was only bound by it if he, too, agreed in writing to be bound by it (para 2 (2)). If following notice by an operator requiring agreement, agreement could not be reached, the operator was entitled to apply to the court for an order conferring the proposed right (para 5). It is clear from these provisions of the old code that only the occupier could confer rights under the old code on an operator. The Law Commission also took that view in their report: para 2.18.
Paragraph 21 of the old code restricted powers to require removal of telecommunications apparatus. The right of removal was triggered by service of a notice under paragraph 21 (1). This could be met by a counter-notice given by the operator under paragraph 21 (3) which either asserted that the person who served the notice was not entitled to require removal; or specifying the steps that the operator proposed to take in order to secure a right to keep the apparatus on the land. In considering those steps, paragraph 21 (5) provided:
“Those steps may include any steps which the operator could take for the purpose of enabling him, if the apparatus is removed, to re-install the apparatus; and the fact that by reason of the following provisions of this paragraph any proposed re-installation is only hypothetical shall not prevent the operator from taking those steps or any court or person from exercising any function in consequence of those steps having been taken.”
Although under the old code many agreements were no more than wayleaves (a form of licence), some took the form of leases. In such cases, the leases potentially attracted security of tenure under Part II of the Landlord and Tenant Act 1954. The procedure for termination and renewal of an agreement under that Act differed from the procedure for termination and renewal under the old code. There was considerable uncertainty about how the two forms of protection interacted. That was one of the problems that the Law Commission addressed.
In paragraph 6.57 of their report they noted that it was not clear that the “dual protection” was either “necessary or helpful”. In a passage beginning at paragraph 6.81 they made recommendations, making it clear in paragraph 6.82 that their recommendations related “only to leases granted after the enactment of the revised Code”. The first recommendation was that leases granted primarily for the purpose of conferring Code rights should not fall within the scope of Part II of the 1954 Act. The second was that where the primary purpose of the lease was not the conferring of Code rights, it should fall within the scope of Part II, and should fall outside the provisions of the Code for the continuity of Code rights.
That, of course, was for the future, since both recommendations applied to leases granted after the enactment of the Code. But the Law Commission also addressed existing agreements. In paragraph 1.43 of the report the Commission stated:
“We are conscious that the introduction of the revised Code will need to be managed with care and considerable thought given to transitional provisions. We do not think that it would be practicable or appropriate simply to apply the revised Code to existing arrangements. This would result in retrospective application, affecting rights which had already arisen. In some cases, there would be disruption to carefully-negotiated agreements by which the parties have sought to strike a balance within the context of the existing Code.”
Accordingly, for some time after the introduction of the Code parties and their advisers would need to be aware of the application of the old code; but as new arrangements were formed and old ones renewed under the Code, the old code would eventually become obsolete.
Although the Law Commission envisaged that there would be transitional provisions, it did not discuss how those transitional provisions should be framed or how they should operate.
Pausing at this point, what I would draw from these recommendations is that:
i) The Code was not intended to apply to existing arrangements (i.e. arrangements subsisting when the Code came into force) including leases protected by Part II of the 1954 Act; but
ii) As and when such leases were renewed, they would fall within the Code if their primary purpose was to confer Code rights, but otherwise they would continue...
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