The Electronic Communications Code prevents the tribunal from granting Code rights to an operator if the party on whom the rights are being imposed intends to redevelop all or part of the land in question and could not reasonably do so if such rights were to be granted: paragraph 21(5).
The building at the heart of the dispute in Cornerstone Telecommunications Infrastructure Ltd v University of the Arts London [2020] UKUT 248 (LC); [2020] PLSCS 166 was to be demolished as part of a larger redevelopment of the Elephant and Castle area of London. But the university was not the developer; it had agreed to sell the building in question to a development company and to rent it back temporarily, while it fitted out a new building to be constructed for it by the developer nearby. It was a condition of the agreement that the university would deliver vacant possession of its existing building free from any third-party rights and telecommunications apparatus, to enable the developer to demolish it.
Because the university did not intend to redevelop itself, it was unable to invoke paragraph 21(5) to resist the imposition of Code rights sought by an operator that was seeking a home for apparatus removed from land that also formed part of the redevelopment. What, then, was the university to do?
It fell back on paragraphs 21(2) and (3) of the Code, which enable prospective grantors to resist the imposition of Code rights if they will suffer loss that cannot be compensated in money, or if the prejudice that they will suffer is so great that it outweighs the benefit that the public will derive from the use of the site. However, it was willing to grant interim Code rights, for a five-year period, instead. Interim rights would make it easier to secure the removal of the apparatus when the agreement expired and the timing would dovetail neatly with completion of its new building, which the developer hoped to have ready in September 2025.
But the operator claimed that this would circumvent the Code, leading to widespread “contracting-out”, with occupiers offering interim rights by consent, while threatening to contest applications for full Code rights. It sought full Code rights for a five-year period under paragraph 20, even though it did not dispute that it might be necessary to resort to litigation to remove it at the end of that period.
It sought to downplay the university’s concerns that this would prevent the university from breaking its lease with the developer timeously, leaving it liable for rent at the rate of £3m per annum while its students continued to work in an unsatisfactory environment, and could even prevent it from delivering vacant possession when the lease ended, rendering it liable to pay substantial damages to the developer.
The tribunal accepted that the development was very likely to go ahead, despite concerns about the current pandemic, and that there was a fair chance that the university would be able to move in the summer of 2025. There was also a very high risk that further litigation would be required to remove the operator from the site. This would cause uncertainty and reputational damage to the university, as well as difficulties in its relationship with the developer and its students – and might prove unsuccessful. These prejudices could not be compensated in money. Furthermore, this case crossed the boundary between prejudice that has to be suffered for the public good and prejudice that is too much to ask.
Allyson Colby, property law consultant
