The Scottish Tribunal’s approach to interim rights applications

Thursday, 23 April 2020

The Scottish Tribunal’s approach to interim rights applications

Tina Middleton looks at how the Lands Tribunal in Scotland has decided its first case under the Electronic Communications Code (”the Code”) in Cornerstone Telecommunications Infrastructure Limited and Thomas Steurt Fothringham (LTS/ECC/2019/006)

The significance of this case

Since the Code was introduced, the Upper Tribunal (Lands Chamber) of England and Wales (“E&W Tribunal”) has seen a flurry of activity. Indeed, in the two years following the introduction of the Code, there have been more reported cases than there ever was during the entire 33 years that the Old Code was in force.

What has been missing however is how the Lands Tribunal in Scotland (“the Scottish Tribunal”) would react. Would they follow the lead of the E&W Tribunal or would they depart from this and establish their own procedures and interpretation of the law?

Whilst it is still early days, practitioners and landowners alike have received a glimpse of how the Scottish Tribunal will approach the Code when it decided its first interim rights case pursuant to paragraph 26 of the Code in Cornerstone Telecommunications Infrastructure Limited and Thomas Steurt Fothringham.

It also determined three key issues in dispute between the parties:

a) valuation

b) indemnity; and

c) tree lopping.

The facts of the case

Cornerstone had an existing agreement with Mr Fothringham which allowed mobile phone services to be provided to Telefonica and Vodafone customers in and around the rural areas of Gelly Wood.

As a result of the A9 dualling works, the site was compulsorily purchased by Transport of Scotland and Cornerstone wished to relocate the site 20 metres away so that the provision of services would not be disrupted. Unfortunately, terms could not be agreed with Mr Forthringham and Cornerstone issued an application pursuant to paragraph 26 of the Code asking it to confer, on an interim basis, the code rights it sought. This was shortly followed by a paragraph 20 application for permanent rights.

The interim rights hearing was listed for 2 days with the parties using the first day to narrow the terms in dispute. Unlimited access, equipment, upgrade and sharing rights were agreed which led to 3 key issues outstanding. The question arose as to how the Tribunal would determine those three issues. Would it:

a) refer to the evidence that had been submitted; and/or

b) rely upon legal submissions?

Decision of the Tribunal

The approach to paragraph 26 hearings

The Scottish Tribunal answered this question by adopting the procedure set out by the E&W Tribunal in the case of EE Limited and Hutchison 3G UK Limited v The Mayor and Burgesses of the London Borough of Islington [2018] UKUT 36 (“the Islington Case”):

“that is to say, to decide the application for interim orders by way of a summary hearing at which evidence would not be heard, although affidavits could be considered, and we would hear, instead, only the submissions of the lawyers. [1]

However, if spectators believed that the Scottish Tribunal would religiously follow the lead of the E&W Tribunal they were mistaken.

Valuation

Compare the approaches of the two Tribunals when dealing with valuation.

In the Islington Case, when faced with an operator proposing an annual sum of £2,551.77 and a landowner suggesting a figure of £12,500, the E&W Tribunal adopted the figure proposed by the operator, explaining that:

the Tribunal will determine the appropriate consideration when it determines the paragraph 20 application for full Code rights. If the Tribunal fixes a higher figure it will be payable retrospectively by the operator.” [2]

The Scottish Tribunal took a slightly different approach. When faced with Cornerstone’s assessment of £252.70 per annum versus Mr Fothringham’s assessment of £4,200 per annum they decided to try and split the difference settling at £2,500 per annum [3].

Despite this slight difference of approach however, there is a consensus between the two Tribunals:

a) both Tribunals believed that there would be “corrective back-dating once the paragraph 20 application has been decided;” [4]

b) both Tribunals decided not to refer to valuation evidence when reaching its conclusions [5]; and

c) neither Tribunal considered, at this interim stage, what the correct valuation pursuant to the Code would be. [6]

Other terms

The Scottish Tribunal has however provided the industry with some key guidance as to its approach to both indemnity provisions and the right to lop trees.

Indemnity

The Code clearly states that the “relevant person” is entitled to compensation for “any loss or damage that has been sustained or will be sustained by that person as a result of the exercise of the code right to which the order relates. [7]” There is no financial limit as to what that compensation is.

However, the indemnity offered by Cornerstone, was an additional remedy which both parties agreed Cornerstone was not obliged to offer; [8] it was an indemnity for unlawful acts.

Notwithstanding this, the landowner proposed an amendment namely that the indemnity was:

Without prejudice to the Grantor’s claims or claims for compensation

in terms of the Code”

Cornerstone argued that such as amendment was:

“inappropriate because it was mixing up two things: compensation for lawful things done by the applicants under the Code, for which the Code provided redress, and indemnity for the consequences of illegal acts or omissions, which was the point of the proffered indemnity”[9]

The Scottish Tribunal agreed explaining that:

“The distinction between rights under the Code and rights under the indemnity clause is clear enough[10]”.

Tree Lopping

Notwithstanding that the right to lop trees is a code right falling with paragraph 3(i) of the Code, it was argued, on behalf of Mr Fothringham, that Cornerstone should be deprived of this code right especially given the large estate owned by Mr Fothringham.

Cornerstone resisted explaining that:

a) the impact of any trees of the signals being transmitted would not be known until the site was built and the apparatus operating; and

b) “whilst it was not apprehended that there would be interference of this kind; it would be highly inconvenient if a problem became apparent and work had to stop so that this additional right could be applied for and obtained: better to have it granted at the outset”[11]

The Scottish Tribunal agreed explaining that:

“We are satisfied that we should grant this right so that if interference from trees or vegetation becomes apparent …… it can be dealt with expeditiously and without interruption of service. The heightened mast of the new apparatus should minimise the likelihood of the right having to be exercised but it is a right which the applicants should have in the interests of maintaining good quality telecommunication services to the surrounding area. No argument of prejudice was advanced by Mr MacEwan – such as the risk of damage to particularly valuable woodland or particular species of trees – and we therefore have no doubt that the public interest should prevail. As to notice, work of this kind, if necessary at all, may have to be done quickly, so we have not imposed a period of notice. As to the need to employ tree surgeons, we assume the applicants can be trusted to act responsibly in the exercise of this right, so we have not thought that necessary.”[12]

Commentary on this decision

Not only is this the first reported case to consider whether a code right sought by an operator should be granted, its effect can be seen in the recent publication of the Scottish Tribunal: “Procedure to be followed in applications under the 2017 Electronic Communications Code” where they state, at paragraph 4 that:

“Following the practice of the UK Upper Tribunal (Lands Chamber) as illustrated in the case of EE Limited and Hutchison 3G UK Ltd v The Mayor and Burgesses of the London Borough of Islington [2018] UKUT 361 (LC), applications for interim code rights under para 26 of the Code will be dealt with by way of summary procedure, that is to say, on the basis of written submissions, affidavits, reports and similar documentation lodged in advance, supplemented by submissions made by parties’ representatives at the First Hearing. No oral evidence will be heard. The Tribunal will endeavour to pronounce its decision in respect of the orders sought at the close of the First Hearing, which failing, as soon as possible thereafter.”

This is welcome guidance and is consistent with both paragraph 26(3)(b) of the Code and Parliament’s intention to give operators faster access to sites.

Tina Middleton is the Senior Code Lawyer, at Cornerstone the UK's leading mobile infrastructure services company set up as a joint venture between Vodafone and Telefónica.

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[1] Cornerstone Telecommunications Infrastructure Limited and Thomas Steurt Fothringham, (LTS/ECC/2019/006) per paragraph 6 [2] EE Limited and Hutchison 3G UK Limited v The Mayor and Burgesses of the London Borough of Islington [2018] UKUT 36, per paragraph 49 [3] Cornerstone Telecommunications Infrastructure Limited and Thomas Steurt Fothringham, (LTS/ECC/2019/006) per paragraph 9 [4] Ibid, per paragraph 7 [5] Ibid, per paragraph 7 [6] Ibid, per paragraph 9 “To go beyond more or less splitting the difference at this stage may suggest to parties that we have formed a view as to where we are eventually heading, which would be wrong: we have no such view” [7] Paragraph 25(1) of the Code [8] Cornerstone Telecommunications Infrastructure Limited and Thomas Steurt Fothringham, (LTS/ECC/2019/006) per paragraphs 11 and 12 [9] Ibid per paragraph 11 [10] Ibid, per paragraph 13 [11] Ibid, per paragraph 16 [12] Ibid, per paragraph 17

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