Telecommunications – Electronic Communications Code – Code rights – Jurisdiction – Agreement creating tenancy under Part II of Landlord and Tenant Act 1954 – Tenancy continuing on expiry of contractual term – Appellant operator occupying land under tenancy to which 1954 Act applied seeking new code rights – Upper Tribunal concluding no jurisdiction to impose Code agreement on operator occupying land under subsisting agreement – Appellant appealing – Whether appellant entitled to seek new code rights – Appeal dismissed
The appellant was formed as a joint venture between Vodafone and Telefonica to own and manage a combined portfolio of telecommunications sites. It was an “operator” within the Electronic Communications Code. The first respondent owned the freehold of Windsor House, 15 High Street, Kings Heath, Birmingham. The second respondent was a property investment company specialising in leasehold telecommunications sites.
The freehold interest in the property was acquired by the first respondent in 2016, subject to a 2002 agreement by which Vodafone held a 10-year tenancy of part of the roof, under Part II of the Landlord and Tenant Act 1954. When the contractual term expired, the tenancy continued under section 24(1) of the 1954 Act. The appellant gave notice under paragraph 20 of Part 4 of the Code seeking new code rights. The second respondent intervened by taking a lease of the rooftop site from the first respondent, subject to the Vodafone agreement.
The new Code was introduced with effect from 28 December 2017, subject to transitional provisions which provided that Part 5 of the Code (dealing with termination and modification of agreements) did not apply to a subsisting agreement to which Part II of the 1954 Act applied. As the Vodafone lease constituted a subsisting agreement, the appellant sought a new agreement under Part 4 of the Code.
The Upper Tribunal determined as a preliminary issue that it had no jurisdiction under Part 4 to impose code rights over land in favour of an operator already in occupation of the same land under a tenancy granted before the Code came into force; and which continued after its contractual expiry date under section 24(1) of the 1954 Act: [2019] UKUT 338 (LC); [2020] EGLR 2. The appellant appealed.
Held: The appeal was dismissed.
(1) In Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2019] EWCA Civ 1755; [2019] PLSCS 201, the Court of Appeal decided that it was a guiding principle of the Code that code rights could only be conferred by the occupier. The primary test of occupation was a question of fact rather than legal status; it meant physical presence on and control of the land. It might be the case that occupation was a mixed question of fact and law, but it was not a purely legal question. If the primary test was not satisfied, the operator holding under a lease would be the person exercising management and control over the land.
Even if the appellant was not the occupier in the primary sense, it did not follow that the second respondent was. It appeared that the second respondent had no physical presence on the roof; and for as long as the appellant retained its tenancy the second respondent was not entitled to interfere with its exclusive possession of the property comprised in the tenancy.
Paragraph 9 of the Code provided that, with limited exceptions, only the occupier of land might confer a code right on an operator. Necessarily that had to mean that an operator in the position of the appellant (if an occupier) could not confer code rights on itself, because it was legally impossible to contract with oneself. If Part 4 could be used to alter or modify code rights it would be an entirely one-sided procedure.
The court should not depart from the proposition established in Compton Beauchamp (even if it could) that, except in limited cases of which this was not one, only the occupier could confer code rights. The right to require another person to be bound by code rights presupposed that they had already been conferred by the occupier (or at least that the operator’s application under paragraph 20 was made against the occupier as well as others).
The decision in Compton Beauchamp bound the court in the present case to hold that, at least in the case of an operator holding under a lease, the operator was the occupier even if it did not have a physical presence on the ground.
(2) The transitional provisions in schedule 2 of the Digital Economy Act 2017 provided for the law to continue to apply in as seamless a manner as possible. However, it required policy choices to be made about when and in what circumstances the new law could be expected to apply. In making those choices, parliament would take account of the legitimate expectations of those who were affected by the change. In the case of the Code, those expectations encompassed not only the expectations of operators, but also those of land owners whose land was burdened by rights created under the old code. In principle, all subsisting agreements took effect as agreements under the Code.
In general, where an operator held under an existing written agreement, it was entitled to apply to renew that agreement under Part 5 of the Code. The only express exception was where the operator held under a lease which entitled it to apply to renew under Part II of the 1954 Act. If the primary purpose of the lease was to grant Code rights, then after the first renewal, the new lease would fall within the scope of Part 5; If it was not, the new lease would remain outside its scope. Thus, the operator under a subsisting agreement had the right to apply to renew it, either under Part 5 of the Code or under Part II of the 1954 Act.
(3) If the appellant were to renew its lease under Part II of the 1954 Act, the new lease would fall outside the scope of Part II as the result of section 43(4) of that Act. It would also have been granted after the coming into force of the Code. It would not be a subsisting agreement for the purposes of the transitional provisions; and Part 5 of the Code would no longer be excluded because Part II of the 1954 Act would no longer apply to it.
Jonathan Seitler QC and Oliver Radley-Gardner (instructed by Gowling WLG (UK) LLP) appeared for the appellants; The first respondent did not appear and was not represented; Christopher Pymont QC and Wayne Clark (instructed by Eversheds Sutherland International LLP) appeared for the second respondent.
Eileen O’Grady, barrister
