Out-Law News | 25 Jun 2020 | 12:09 pm | 4 min. read
A telecoms operator which is occupying a site under an implied tenancy at will or periodic tenancy does not have rights under the Electronic Communications Code (Code) and cannot use the provisions of the Code to seek long term rights to remain, the Upper Tribunal (Lands Chamber) has ruled.
In what is thought to be the first case involving witness cross-examination to have been conducted by the Upper Tribunal (Lands Chamber) via videoconferencing platform due to the Covid-19 pandemic, judge Elizabeth Cooke, a former law commissioner, strongly suggested, however, that previous case law may have been wrongly decided, with the potential for "results that are unacceptable in terms of the policy of the Code". She said that she would grant the operator, Arqiva, permission to appeal if it requested and suggested that the Court of Appeal may wish to consider expediting an appeal in view of the wide-reaching implications of the case.
Property dispute resolution experts, Ian Morgan and Alicia Foo of Pinsent Masons, the law firm behind Out-Law, advised Arqiva in the case. Morgan said: "It is critical that a solution is found that enables the Code to achieve what it set out to do – support the speedy and cost effective rollout of modern communications technology across the country so that, across the UK, technology such as 5G becomes and remains a viable part of our digital ecosystem."
Arqiva occupied a site at Queen's Oak Farm, Towcester, owned by AP Wireless II (UK) Ltd (APW), under a lease which expired in October 2016. Although the lease had expired, Arqiva remained in occupation and continued to pay rent to APW whilst it tried to negotiate a new lease with APW. Lease renewal negotiations having not concluded, Arqiva, which has powers conferred by the telecoms regulator, Ofcom, to use the Code, was seeking to use those powers by asking the Upper Tribunal (Lands Chamber) to impose a lease.
The judge first had to establish the nature of Arqiva's occupation of the site. She found that Arqiva was in occupation as of October 2016 under an unwritten tenancy 'at will', rather than a periodic tenancy.
As there was no written agreement underpinning the tenancy at will, which arose by implication whilst Arqiva and APW were negotiating the terms of a new lease, this meant that there was no "subsisting agreement" in writing allowing Arqiva to keep its equipment on the site, as required by the Code. This meant that Arqiva was not entitled to apply for Code rights under the transitional provisions in part 5 of the Code. The expired lease could not fill in for this role, as it was no longer in force.
Having found that there was no subsisting agreement, the judge then considered whether she had jurisdiction to impose Code rights under paragraph 20 of part 4 of the Code. She found that she did not. This was because, in the CTIL v Compton Beauchamp Estates decision of October 2019, the Court of Appeal is understood to have ruled that the courts had no jurisdiction to impose an agreement under paragraph 20 on an operator already in occupation at a site. She was also unable to impose temporary Code rights under paragraph 27 of Part 4, also sought by Arqiva, as this procedure also presupposes proceedings under paragraph 20.
The judge said she had no choice but to follow the decision of the Court of Appeal, even though its effect was to create a "black hole" in which operators in Arqiva's position would be unable to obtain Code rights at all. She said that this appeared to be "inconsistent with the policy of the Code …. to facilitate the public interest in access to a choice of high quality electronic communications services".
"The idea that an operator should be debarred from obtaining Code rights in relation to particular site precisely because it is in occupation, has apparatus there, and is providing a service from the site is baffling and I do not understand why such a policy would be adopted," said judge Cooke who, in her previous role as Law Commissioner, was involved in drafting the recommendations to the government which fed into what became the new Code.
"If [my] provisional conclusion is correct, the operator could presumably make an application under paragraph 20 in relation to an immediately adjacent site in the same ownership, and move its apparatus a few yards sideways. Or it could shut down its equipment and the service it provides ... and move out of occupation, so as to be in a position to start afresh with the landowner back in occupation. Why such a waste of time and effort and such an interruption in services is a good idea is beyond me," she said.
The judge said that there were potentially many operators in a similar position to Arqiva, who "remain on sites following the expiration of old Code agreements before 28 December 2017 [when the new Code came into force] as tenants at will".
"Considerable cost and wasted effort will be incurred if they all have to move out and start again, or find a friendly operator, confer Code rights upon it, and then apply for the landowner to be bound," she said.
The judge said she was of the view that, "with great respect to the Court of Appeal…a wrong turn may have been taken, and that the narrow interpretation of the requirement of occupation in the Code leads to results that are unacceptable in terms of the policy of the Code".
"It may be that the Court of Appeal … has misunderstood the structure of the Code and drawn the lines around paragraph 20 too tightly," she said. "It may be that the less prescriptive approach of the tribunal at first instance … would have meant that paragraph 27 could retain a meaningful function for operators in occupation, that operators with 1954 Act-protected periodic tenancies were not shut out from the Code, and that there is no need to stretch paragraph 34(8) outside its obvious context whenever a new context is found that requires a deemed occupation."
Alicia Foo said: "This is an important judgment by a highly respected former Law Commissioner questioning as it does the direction previous cases in the Tribunal and Court of Appeal have taken. In its short life, the Code has already prompted two Court of Appeal decisions, one of which is awaiting permission to appeal from the Supreme Court. The other is awaiting a hearing from the Court of Appeal, with this one to join its ranks. Urgent clarity on the outworkings of the Code is needed if the government's vision of a modern digital future is to be realised. One of the core planks of the Code was the public interest in having access to a choice of high quality electronic communications services. With cases log-jammed in the Tribunal and higher courts, the ethos behind the Code being enacted is in danger of being stalled."
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