The Bridgewater Canal Company Ltd v Geo Networks Ltd
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE LEWISON,Mr Justice Lewison |
| Judgment Date | 19 March 2010 |
| Neutral Citation | [2010] EWHC 548 (Ch) |
| Date | 19 March 2010 |
| Court | Chancery Division |
| Docket Number | Case No: HC09C04145 |
[2010] EWHC 548 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Before: The Hon Mr Justice Lewison
Case No: HC09C04145
Jonathan Small QC and Oliver Radley- Gardner (instructed by Wake Smith and Tofields) for the Claimant
David Elvin QC and Nicholas Taggart (instructed by Lawrence Graham LLP) for the Defendant
Hearing dates: 10 th March 2010
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic
Mr Justice Lewison:
Introduction
The Bridgewater Canal, opened in 1761 and engineered by Joseph Brindley, ushered in the great age of the canals. It was built to give citizens of the growing city of Manchester access to cheaper coal from the Duke of Bridgewater's coal mines. Now, however, what the citizens of Manchester want is access to broadband and fibre optic cables. Far from facilitating access, the Bridgewater Canal is now an obstacle. To be more precise; in the language of the electronic communications code it is a “linear obstacle”. Under the Code the operator of a communications network has or may acquire the right to lay and keep cables under the canal. The question raised by this arbitration appeal is: what does he have to pay for?
The facts in brief
The Bridgwater Canal Company Ltd (“Bridgwater Canal Co”) is (or is assumed to be) is the long-leasehold owner of the Bridgewater Canal. Geo Networks Ltd (“Geo”) has an existing duct under the Bridgewater Canal by virtue of a deed made in 2001 between the predecessors in title of both Bridgwater Canal Co and Geo for which it pays a rent. It wants to lay an additional fibre optic cable through that duct. It is agreed that the deed does not give Geo that right, but that it is entitled to rely on the Code. Bridgwater Canal Co does not oppose the laying of that further cable, but says that it is entitled to payment of a sum under the provisions of the Code to reflect the value of the right to keep the additional cable in position once it has been installed. Geo's position is that the Code does not require it to make a payment for that right. It is required to pay for the right to carry out works, but not for the right to keep the cable in place once the works of installing it have finished. The dispute between the parties was referred to the arbitration of Mr Ian S Thornton-Kemsley TD MRICS DipFBOM HDA ACIArb. He agreed with Geo. He decided that Bridgwater Canal Co was not entitled to object to the fibre optic cable crossing its canal. Since it had no right to object to the crossing of the canal it followed that it had no right to demand payment.
With the permission of Simon J the Bridgwater Canal Co appeal. Mr Jonathan Small QC and Mr Oliver Radley-Gardner argued the case for the Bridgwater Canal Co. Mr David Elvin QC and Mr Nicholas Taggart argued the case for Geo.
Agreed facts
The arbitrator recorded a number of agreed facts. The new fibre optic cable was to be laid under the canal in one of seven vacant ducts installed under the 2001 deed. However, the deed itself did not give Geo that right. The crossing of the canal was a critical part of Geo's proposed network. Alternative routes and been explored but were not available. The method of installation was agreed. According to the agreed method statement it appears to consist of propelling the new cable through the existing duct by the use of compressed air. The work is carried out from the highway and no one seems to need to go onto the canal. The parties agreed that provided that there were sufficient safeguards to protect the interests of Bridgwater Canal Co and the canal itself, no aspect of the proposed installation would affect the value and use of the land “or any of its interest”.
The award
When the arbitration started both parties were arguing about the terms on which the right to carry out the works should be granted. The parties had agreed a term of 25 years, but were in dispute about such matters as whether Geo should have the right to alter the type and size of the cable; what restrictions on alienation should be included and so on. The arbitrator took legal advice about his powers and in the light of that advice had legal representations and counter-representations from the parties. Having considered that advice and the representations the arbitrator concluded that Geo had the right to install the cable as a result of the Code itself. He concluded that the arbitration was only concerned with the practical impact of the works to the canal. As he put it:
“I therefore consider that the key question for the parties – and for me as arbitrator under paragraph 13 of the Code – is not whether, but how, those works are to be carried out. Paragraph 12 (1) of the Code expressly grants the right to execute the works.”
He held that he had no power to award terms regulating the future conduct of the rights. Those rights were governed by the Code. He therefore held that he had no power to make any award about terms except those regarding the process of installation itself. Having found that the method of carrying out the works had been agreed, and that carrying out the works according to that method would not interfere with the canal, he decided that no further modification of terms and conditions was needed. The arbitrator then went on to consider the basis on which he could award a money payment; noting that “this is where the statutory drafting becomes particularly difficult to apply in practice.” He distinguished between the right to execute the works on the one hand and the right to install and keep the line on the other. He decided that money was payable only for the former right and not for the latter. As he put it:
“I hold therefore that the provisions of 13 (2)(e) relate solely to the carrying out of the works and not to the granting of any rights.
The Parties should be aware that it would seem to me to be a consequence of my findings at 1 above that the “person with control” has no ability to object to the installation of a line crossing the Canal. It would follow therefore that there is no ability to demand payment, whether as a single capital sum or a recurring “rental” payment, in respect of that right. This is the case in respect of telecommunications apparatus laid in the public highway where a similar right to install has been granted.”
The statutory framework
Introduction
The Code first saw the light of day in Schedule 2 to the Telecommunications Act 1984 and has since been amended by the Communications Act 2003. It enables operators of communications networks to acquire rights to install and maintain equipment on other people's land. An overview of the Code is necessary before going on to discuss the detail. Many of the relevant provisions of the Code are set out in the Appendix to this judgment, so I merely summarise the salient provisions at this stage. The Code is not one of Parliament's better drafting efforts. In my view it must rank as one of the least coherent and thought-through pieces of legislation on the statute book. Even its name is open to doubt. Although section 106 of the Communications Act 2003 says that the code set out in Schedule 2 to the Telecommunications Act 1984 is referred to as “the electronic communications code” in “this Chapter”, the amendments made by the 2003 Act did not include changing the title to Schedule 2, so that in Schedule 2 itself it is still called “The Telecommunications Code”. I have simply called it the Code.
The general regime
In the ordinary case an operator of a network requires the agreement of an occupier of land in order to exercise rights under the Code. These rights include the right to execute works connected with the installation maintenance adjustment repair or alteration of apparatus; the keeping of apparatus on under or over the land; or the entry on to the land to inspect apparatus (§ 2 (1)). The occupier's consent is needed before any of these rights can be exercised; and is needed for all of them. Normally a consent given by the occupier of land who is neither the freeholder nor a lessee will only bind the freeholder or lessee if they agree to be bound. If an operator requires an occupier to agree that any of these rights should be conferred on an operator, he may give notice to that effect (§ 5 (1)). Such a notice may also be given if the operator wants consent given by an occupier to bind holders of other interests in the land. If no agreement has been given after 28 days, the operator can apply to the court for an order conferring the proposed right (§ 5 (2)). On such an application the court must make an order in the operator's favour; but only if one of two conditions is satisfied. The first is that any prejudice caused by the order is capable of being compensated by money. The second is that any such prejudice is outweighed by the benefit accruing from the order (§ 5 (3)). In exercising this power the court must have regard to the principle that no person should unreasonably be denied access to an electronic communications network (§ 5 (3)). This principle recurs in the Code and is clearly one to which Parliament attached considerable importance. The terms of an order must include terms and conditions to ensure that the least possible loss and damage is caused by the exercise of the right (§ 5 (5)). In addition the order must include financial terms. The financial terms that the order must include are:
i) Terms for the payment of such consideration as appear to the court would have been fair and reasonable if the agreement had been given willingly; and
ii) Terms ensuring that persons...
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Mrs Lynn Brophy v Vodafone Ltd
...correct in every respect, because both parties to the appeal proceeded on the basis that they were. In a later case, The Bridgewater Canal Company Ltd v Geo Networks Ltd [2010] EWHC 548 (CH) Lewison J summarised the relevant legal principles as follows: "37. Third, the payment terms must be......
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