24 January 2024

Welcome to the latest Burges Salmon Electronic Communications Code Case Law Update.

2023 was a quiet year for reported Code cases, so rather than our usual quarterly instalments, we have created a single round-up of the key Code cases of 2023.

This edition contains:

  • A Court of Appeal decision addressing who is treated as a party to a Code Agreement for the purposes of Part 5 of the Code;
  • A First Tier Tribunal decision allowing an operator’s Paragraph 20 application to proceed, even where it had failed to follow the Landlord and Tenant 1954 Act renewal procedure; and
  • Scottish decisions which offer helpful reminders on how parties should approach Code litigation in all jurisdictions

We have also provided an update on legislative changes to the Code, which can be found here.

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Vodafone v Potting Shed Bar and Gardens Ltd (formerly known as Gencomp (No 7) Ltd) and AP Wireless II UK Ltd – 14 July 2023

Key points:

  • A head tenant whose lease was granted during the term of an existing Code agreement is not (for the purposes of the Code) a successor in title to the freehold owner who granted the Code agreement.
  • However, such a head tenant is nevertheless to be treated as a party to the Code agreement which means that a head tenant in this position will be able to serve notice to terminate or modify an expired Code agreement.

This was an appeal of the Upper Tribunal decision reported in our Autumn 2022 update. In this case, a landlord (Publico) granted a lease of a site to a new head tenant (APW), subject to a pre-existing Code agreement granted to Vodafone. Publico’s freehold interest was subsequently sold to a new owner (Potting Shed). At first instance, the Tribunal found that the operator should use Paragraph 20 of Part 4 of the Code (which generally deals with the grant of new agreements) rather than Paragraph 33 of Part 5 (which generally deals with renewals of expired Code agreements) to renew Code the agreement. It found that Potting Shed was not the occupier and so could not grant Code rights and APW was not “a party to” the existing Code agreement as required by Part 5. Accordingly, the Tribunal found that the correct process would be for the operator (Vodafone) to seek new rights under Part 4 from APW.

There are several important distinctions between Part 4 and Part 5. This includes the amount of notice which an operator must give to renew the agreement (6 months under Part 5 but only 28 days under Part 4) and the burden of proof for establishing the grounds to impose a Code agreement (which is on the operator under Part 4 but the landlord under Part 5). More importantly, whilst Part 5 makes provision for variation and termination of agreements, Part 4 does not. The result of the Tribunal’s finding was, therefore, that head tenants in the position of APW would be unable to bring a Code agreement affecting their demise to an end. The Tribunal noted at the time that this was likely to pose issues for occupiers hoping to redevelop sites with similar ownership structures.

APW appealed this decision, arguing that it should have been considered a party to the Code agreement under Part 5 of the Code. APW’s arguments were based on Paragraph 10(3) of the Code, which provides that “A successor in title who is bound by a code right by virtue of sub-paragraph (2)(a) is to be treated as a party to the agreement by which O conferred the right.”

APW argued that:

  1. It was a successor in title to Publico and so should be treated as a party to the Code agreement; and
  2. If it was not a successor in title to Publico, Paragraph 10(3) was not exhaustive of who was to be treated as a party to the agreement and APW should still be treated as such.

The Court rejected the first argument, finding that the successor in title was Potting Shed as it had acquired the freehold title from Publico.

However, the Court did accept APW’s second argument. The Court noted that the Code makes no provision for an operator assignee of a Code agreement to be treated as a party to the agreement, but that it was common ground that they should be treated as such. As the lease granted to APW entitled APW to the benefit and burdens of the Code agreement, APW should likewise be treated as a party to the Code agreement. This meant that Vodafone had to renew the Code agreement under Part 5 of the Code rather than imposing a new agreement under Part 4.

The reasoning behind this decision will be doubted by many, as an assignment of a Code agreement is distinct from the grant of a concurrent lease. It is likely that the Court adopted this pragmatic approach in order to address a problematic flaw in the Code.

Vodafone sought to appeal the decision to the Supreme Court, but permission to do so has been refused.

This decision will be an important development for concurrent leaseholders who were previously left in limbo by the Code, particularly if they wished to remove or relocate the telecommunications equipment to develop a site. 

On Tower UK Limited v Gravesham Borough Council – 18 October 2023

Key points:

  • The First Tier Tribunal has allowed an operator’s application for a new Code agreement to proceed, even where its claim for a new lease under the Landlord and Tenant Act 1954 had failed.
  • The Tribunal stressed that this was a narrow exception due to the operator’s 1954 Act claim being dismissed on a technicality due to a procedural issue.

In this case, the site provider (Gravesham) sought to remove the operator’s (OnTower) equipment from the rooftop of a residential building in order to carry out urgent repairs to the roof. As OnTower occupied the rooftop under a lease protected by the Landlord and Tenant Act 1954, Gravesham sought to bring the agreement to an end by serving a notice under Section 25 of the 1954 Act.

OnTower issued a claim for a new lease under the 1954 Act but did not serve the claim form within the 4 month time limit for service of Court proceedings. The County Court refused to grant an extension of time for service of the Claim form and so OnTower lost its entitlement to claim for a new lease under the 1954 Act.

When Gravesham then served a Paragraph 40 notice requiring OnTower to remove its equipment, OnTower applied to the Tribunal to impose a new agreement under Paragraph 20. Gravesham requested that this application be struck out as an abuse of process, on the basis that both the Court of Appeal and Supreme Court had previously found that where an operator had the benefit of 1954 Act protection, it must follow that process and could not opt to renew an agreement under the Code.

The Tribunal refused to strike out the application. Whilst it agreed that where a site provider defeated an operator’s 1954 Act application on its substantive grounds, the operator would have no reasonable prospect of obtaining a new Code agreement under Part 4 of the Code, it considered that where its 1954 Act application had been decided on a procedural technicality, it remained open to the Tribunal to consider the Part 4 application.

This case appears to set a concerning precedent which would allow operators to circumvent the 1954 Act procedure by deliberately failing to comply with procedural requirements. Whilst the Tribunal emphasised that it would prevent such abuse, the level of sympathy the Tribunal showed to OnTower (whose reasons for needing an extension had been rejected by the County Court) may well concern site providers.

Marks & Spencer Plc v Cornerstone Telecommunications Infrastructure Ltd – 13 June 2023 and 28 September 2023

Key points:

  • When arguing against a Code agreement being imposed, landowners should ensure all relevant concerns are before the relevant Court or Tribunal
  • Where an operator is successful on a Paragraph 20 application but success on the terms of the Code agreement was divided between the parties, an operator is unlikely to be able to recover their costs from the land owner

This long-running dispute has resulted in two recent Scottish law decisions.

The first of these was a decision by the Court of Session regarding M&S’s appeal of a Scottish Lands Tribunal decision. The Tribunal had previously found in the operator, Cornerstone’s, favour in imposing a Code agreement on M&S. At a late stage in the process of finalising the terms of the Code agreement, M&S requested that the Tribunal consider a new point concerning electro-magnetic field exclusion zones.

Exposure to electro-magnetic fields is subject to 2 different limits defined by the Internal Commission on Non-Ionizing Radiation Protection (ICNIRP), an “occupational” limit applying to those exposed in the course of their work and a “public” limit for all non-work related exposure. Only occupationally exposed workers are permitted to enter into the public exposure zone surrounding electromagnetic field emitting apparatus.

Whilst M&S had previously raised concerns about members of the public at a neighbouring hotel being within the exposure zones, its further point was that its staff and contractors who needed access to rooftop equipment were not occupationally exposed workers and so would be unable to reach M&S’ equipment which was located within the public exposure zone.

The Tribunal declined to consider this issue on the basis that it had previously dealt with all of the ICNIRP issues in dispute. The Court of Session upheld this decision.

This is a reminder for site providers who are opposing the imposition of a Code agreement to ensure that all relevant objections are raised with the Tribunal before it is too late.

The second decision concerned the costs of the dispute.

Whilst CTIL had been successful in imposing a Code agreement on M&S, the Tribunal had found that the terms being offered by CTIL were not wholly fair or reasonable and that it was reasonable for M&S to oppose these terms. There had been around 40 issues on the drafting of the Code agreement which were in dispute, with the Tribunal finding in M&S’ favour on some of these and in CTIL’s on others. The Tribunal also found, that both parties might have done more to facilitate negotiations.

Because of these factors the Tribunal found that costs would not be awarded to either party. It is worth noting that, since this decision, the amendment of paragraph 96 of the Code means that even greater emphasis will be placed on the parties’ approach to negotiations and other means of alternative dispute resolution in determining the cost of proceedings.

Both decisions primarily concerned Scottish procedural rules, but it is likely that they would be approached in a similar manner under English and Welsh law, and they act as a helpful reminder of the conduct expected of parties in Code disputes.

2017 Electronic Communications Code New Changes – What You Need to Know

Since the Implementation of the Code in 28 December 2017, two pieces of primary legislation have been introduced to amend the provisions of the Code:

  • The Telecommunications Infrastructure (Leasehold Property) Act 2021 (TILPA) received Royal Assent on 15 March 2021
  • The Product Security and Telecommunications Infrastructure Act 2022 (PSTIA) received Royal Assent on 6 December 2022

However, implementation of this legislation has been gradual.

2023 also saw the introduction of the Electronic Communications Code (Jurisdiction) (Amendment) Regulations 2023 (SI 2023/1220) (ECCJAR).

The following changes have been made to the Code over the last year:

  • New procedure for imposing rights on unresponsive multi-dwelling unit landlords;
  • Clarification of sharing rights;
  • Expansion of rights to fly lines for operators sharing apparatus;
  • New rights to share and upgrade pre-Code underground apparatus;
  • New national security ground of objection to Code agreements being imposed;
  • Expansion of the Tribunal’s powers to modify the terms of expired Code agreements pending a decision on their modification, termination or renewal; and
  • Introduction of provisions to encourage the use of Alternative Dispute Resolution (ADR)

From 6 April 2024, there will also be procedural changes concerning Code cases, with the First-Tier Tribunal taking on the primary responsibility for hearing Code cases from the Upper Tribunal.

However, no dates have yet been confirmed for when the remaining amendments will take effect. These include:

  • Harmonisation of the renewal processes under the Landlord and Tenant Act 1954 with the Code;
  • New procedure for imposing rights on unresponsive landlords for installing apparatus under or over bare land; or
  • Operator complaints handling provisions in OFCOM Code of Practice.

More detail on these changes can be found here.

Key contact

Chris Preston

Chris Preston Partner

  • Real Estate Disputes
  • Real Estate Development
  • Telecommunications

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