Supreme Court Hearing Decision

The Supreme Court has handed down its judgment in two Cornerstone appeals on the meaning of the term ‘occupier’ as used in the Electronics Communications Code (“Code”) – those appeals being known as Compton Beauchamp and Ashloch.

Cornerstone’s appeals were heard alongside an appeal by On Tower and considered whether an operator, which already has electronics communications apparatus installed on land, can acquire new code rights from the landowner. The acquisition of new rights is vital to the roll out of telecommunications technology and improving connectivity in the UK.

The meaning of ‘Occupier’

Operators seeking new Code rights over land must obtain them either by agreement with ”the occupier of the land” or by asking the Court to impose rights under Part 4 of the Code. The question of who is ”the occupier” became crucially important because paragraph 9 of the Code says that a code right may only be conferred on an operator by the occupier of the land.

In earlier decisions, the Court of Appeal determined that, when an operator installs its equipment on the land, the operator itself will often become the occupier. It will, therefore, be unable to grant itself new rights; and so, cannot use the Code to obtain new rights at all.

Although the operator may be able to acquire new rights at the end of the term of its existing agreement through a renewal under the Landlord and Tenant Act 1954 or Part 5 of the Code, it would not be able to acquire additional code rights during the term of the existing agreement - even by consent. If the current agreement was incapable of renewal by either means, it would remain forever locked out of the Code leaving operators (and their networks) in an uncertain position.

Cornerstone’s arguments

Cornerstone argued that:

• an operator is always able to acquire code rights under Part 4, whether the term of its existing agreement has expired or not;
• the operator is never the occupier – its apparatus and any agreement it has over the land already should be completely disregarded when considering who was occupying the land (or, alternatively, that only an operator with a right to control the land could be an “occupier”);
• the policy behind the Code was to provide operators with a speedy and cost-effective means of accessing code rights in order to maintain and extend coverage;
• various parts of the Code clearly implied that an operator in occupation could acquire new rights under paragraph 20.

Supreme Court Judgment

The Supreme Court decided that:

• the word “occupier” has different meanings depending on the context in which it is used and it is inherent in paragraph 9 of the Code that the “operator” who seeks a code right over an existing site must be different from “the occupier of the land”;
• an operator’s own occupation of land (if any) should be ignored where that operator seeks new code rights over an existing site;
• an operator can, therefore, reach a consensual agreement for additional rights with the landowner, or have additional rights imposed by the Court under paragraph 20 of the Code, during the term of an existing agreement; and
• the correct landowner will usually be the person who conferred the rights to install to begin with, or their successor.

However, it also decided that:

• during the term of a valid existing agreement, paragraph 20 can only be used to impose additional code rights and not to modify existing rights;
• once a renewal under Part 5 has become available to the parties, that is the only route by which the operator and the site provider may agree to modify, renew or terminate code rights;
• the Code does not require that all occupation of any operator with apparatus on land be disregarded - only the occupation of the operator seeking a new code right itself.

The Outcome of the Appeals

In Compton Beauchamp, at first instance, it was accepted that Vodafone was in actual occupation of the site rather than Cornerstone which sought the code rights. The Court’s determination meant that Vodafone should itself have sought the rights from the landowner, not Cornerstone. Due to this technicality, the Compton Beauchamp appeal was dismissed.

However, the reasoning of the Court of Appeal on the occupying operator problem has been unanimously overturned which is good news.

This means that, where an operator currently has no rights over an existing site, it can obtain a whole new agreement under Part 4 of the Code. Further, where it has a valid existing agreement, it can acquire new rights in addition to those it already has pending the renewal of that agreement. Given that so many code agreements are very out of date and limit the apparatus an operator may deploy, this allows operators to access much-needed rights to upgrade and share sites.

Accordingly, in the On Tower case, where the operator was itself in occupation and seeking code rights from the landowner, the operator’s occupation was disregarded and it could validly seek new rights from APW. Therefore, On Tower’s appeal was allowed.

How exactly the Supreme Court’s primary conclusion applies in scenarios where the operator enjoys a continuing 1954 Act tenancy over the site remains to be seen. The Ashloch appeal, whilst heard with the other appeals, is yet to be finally determined, the Court having requested further submissions on the extent to which Cornerstone was seeking new rights or a modification of its existing agreement.

What this means for Cornerstone

Although the appeal on Compton Beauchamp was ultimately dismissed, the Supreme Court has agreed with our interpretation that an operator in occupation seeking new code rights can obtain them under Part 4 of the Code from the landowner, even during the term of a valid unexpired agreement. This decision should help to now clarify the uncertainty that has lingered in this space and provide operators with the ability to ensure that their sites are fit for purpose and able to deliver the connectivity which the Government and the public expect.

A link to the judgment can be found at: https://www.supremecourt.uk/cases/docs/uksc-2019-0225-judgment.pdf