In Covent Garden IP Ltd v Cornerstone Telecommunications Infrastructure Ltd [2025] UKUT 136 (LC); [2025] EGCS 75, the Upper Tribunal (Lands Chamber) has confirmed that whether a building owner is entitled to more than nominal consideration when compelled to allow access for a multi-skilled visit (to ascertain whether its building is a suitable site for the installation of electronic telecommunications apparatus) is a matter of discretion for the First-tier Tribunal.
Whether the decision will lead to a change from the current position, where the majority of such agreements are concluded for no consideration, will remain to be seen.
Key points
- Owners can in principle seek consideration for access for an MSV
- Whether such consideration is payable is in the discretion of the FTT
- It is likely to be rare that compensation will be justified
Background
The case concerned an office building known as Alder Castle in the City of London, which was acquired by Covent Garden for £103m in 2019 and on which it spent substantial sums refurbishing.
CTIL had identified Alder Castle as a possible replacement site for electronic communications apparatus which it had been required to remove from a nearby building. Covent Garden allowed an initial inspection but became less cooperative as it developed its own refurbishment scheme.
In October 2023, CTIL formally requested an interim rights agreement to allow further investigations. When that was ignored, CTIL referred the matter to the tribunal. In February 2024, the FTT gave directions, which included listing the matter for hearing on 16 July 2024 and providing that if the parties were unable to agree the consideration to be paid under the agreement, either party could apply not earlier than 12 April 2024 for permission to rely on expert valuation evidence. The delay was to allow time for negotiation.
Covent Garden did not resist an agreement in principle but wanted consideration of £2,000 in place of the nominal £1 offered by CTIL. On 19 June – less than four weeks before the hearing – it applied to rely on expert valuation evidence. The application was refused on 24 June on the basis that it was misconceived.
Covent Garden’s application for permission to appeal the order of 24 June at the hearing on 16 July was also refused. The FTT made an order imposing an agreement for the interim rights requested, for £1 consideration. Covent Garden appealed.
Relevant provisions of the Code
Under the Electronics Communications Code contained in Schedule 3A to the Communications Act 2003, operators such as CTIL can acquire – or the tribunal can impose – code rights.
The most common code right is the right to install electronic communications apparatus, which includes a right to enter a building to undertake a non-intrusive MSV (Cornerstone Telecommunications Infrastructure Ltd v The University of London [2019] EWCA Civ 2075; [2019] EGLR 58).
Code agreements are conferred by agreement between the operator and the occupier of land under paragraph 9. If agreement cannot be reached, an operator may apply to the FTT for an order imposing an agreement under paragraph 20.
Paragraph 26 makes provision for interim code rights, which, to avoid abuse, cannot be simply agreed between the parties but must be imposed by order. An operator need only show a good arguable case that the usual test for code rights is satisfied.
While, under paragraph 23, a code agreement must include terms for payment of consideration by the operator, an agreement for interim rights may do so. Consequently, the agreement will include provision for payment of consideration if the FTT thinks it “appropriate” that it should.
In either case, the consideration, under paragraph 24, is an amount representing the market value a willing buyer would pay a willing seller for the agreement on certain assumptions which include the “no-network” assumption.
The decision
The tribunal concluded there is no principle that expert evidence cannot be relied on in interim rights claims where appropriate. Consequently, the FTT’s decision of 24 June was based on a misunderstanding of law and practice and procedurally irregular.
However, it did not follow that the substantive decision must be set aside unless Covent Garden could show that the decision of 16 July to allow only nominal consideration was rendered unfair by the earlier refusal to permit expert evidence.
The FTT was entitled to decide in the exercise of its discretion on the material before it that it was not appropriate to include more than nominal consideration. Covent Garden’s application was hopelessly late with no explanation for the delay and no draft report proposing consideration. It set out an unrealistic timetable and would have disrupted the substantive hearing.
Opening the floodgates?
Nominal consideration is routinely agreed for interim rights between the operator and landowner. Such rights are exercisable for a limited period and permit a small number of vetted surveyors or other experts to access a rooftop or service areas of a building for a few hours on two or three occasions.
Owners are entitled to compensation for any loss or damage caused by the exercise of the rights and, where substantial buildings are involved, typically fees are paid to cover approval of risk assessments, contractors’ credentials, plans and providing an escort around the building.
The no-network assumption removes the commercial value of the rights to the operator. Consequently, as in this case, the costs incurred in pursuing such a claim are likely to far exceed the consideration payable.
So while the tribunal’s decision clarifies the legal position, it is unlikely to lead to a substantial increase in claims.
Louise Clark is a property law consultant
Photo © Ken/Unsplash
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