Electronic Communications Code - Who can confer code rights?

Friday, 17 July 2020

Cornerstone has been given permission to appeal the Compton Beauchamp case to the Supreme Court and the Ashloch case to the Court of Appeal.

In this article Carlos Pierce and Tina Middleton review both cases and consider whether these decisions fly in the face of Government’s intention for the new Code – which was introduced to make it easier and more cost-effective for operators to “deploy and maintain their infrastructure”.

Here we look at:

  • The decision of the Court of Appeal (“CoA”) in Cornerstone Telecommunications Infrastructure Limited and Compton Beauchamp Estates Limited [2019] EWCA CIV 1755 (“Compton Beauchamp”);
    and
  • how the interpretation of that decision by the Upper Tribunal (Lands Chamber) (“the Tribunal”) apparently presented Cornerstone with an “insurmountable obstacle” in Cornerstone Telecommunications Infrastructure Limited and Ashloch Limited and AP Wireless II (UK) Limited [2019] UKUT 0338 (LC) (“Ashloch”)

What was the Compton Beauchamp case about?

The Electronic Communications Code1 (“the Code”) gives code operators certain rights over land – code rights. This includes the right to install and keep installed electronic communications apparatus (“Apparatus”) on under or overland.

Paragraph 9 of the Code explains that, in a consensual environment, code rights are granted or “conferred” upon operators by “occupiers”. Where a consensual agreement cannot be sought, and the Tribunal is asked to order the grant of a Code agreement pursuant to paragraph 20 of the Code, it is the “relevant person” who confers the code rights.

The issue that arose in Compton Beauchamp was the identity of “the relevant person” for the purposes of conferring code rights.

The facts of Compton Beauchamp

Vodafone Limited (“Vodafone”) was granted a 10 year lease of land at Galleyherns Farm. That lease did not benefit from security of tenure under the Landlord and Tenant Act 1954 (“the 1954 Act”) and expired in 2014.

Upon expiry, Vodafone occupied the site under a tenancy at will until October 2017 when notice was given terminating the tenancy and seeking removal of the Apparatus installed on the land. Possession proceedings were subsequently issued against Vodafone in November 2017. Vodafone therefore “had no rights of occupation in relation to the site other than its right under the old Code which deems the continuing presence of its apparatus to be lawful and prevent its removal except by an order of the court.”2

Faced with possession proceedings, and with the landowner’s agent threatening to call the police should access to the site be sought, Cornerstone, issued paragraph 20 and 27 proceedings against the landowner seeking:

  1. temporary rights under paragraph 27 of the Code to permit access to the existing Apparatus;
    and
  2. a 10 year agreement pursuant to paragraph 20 of the Code.

No rights were sought by Cornerstone against Vodafone.

Decision of the Tribunal

The relevant person

The Tribunal:

  1. held that the “relevant person” who confers code rights pursuant to paragraph 20 of the Code is the same person who can confer code rights by agreement; it is the occupier.3 “The occupier is the person in actual control of the site for the time being;” 4
    and
  2. rejected the proposition that “the person with a right to possession is the occupier for the purpose of the Code if there is someone else in actual occupation.”5

In applying this test to the facts presented to the Tribunal, it was determined that Vodafone, rather than the landowner, would need to confer code rights on Cornerstone; Vodafone’s apparatus was lawfully on the site and it was irrelevant that Vodafone had “precarious” rights (i.e. that it was facing possession proceedings.)

The exception to this rule

There was however an exception to this rule – where an operator is in occupation and seeks code rights itself. In this scenario, the Tribunal recognised that:

“rights may be conferred on an operator who is already in occupation, and that in such a case the person who confers the rights (voluntarily or by compulsion) may not have been in occupation when the notice was given to them under paragraph 20(2) …. The effect of the same parties entering into a new agreement on different terms will be that the previous agreement will be terminated by operation of law… The Tribunal can compel the grant of new rights by a site owner to an operator which is itself in occupation.”6

The Court of Appeal’s decision

The relevant person

In upholding the Tribunal’s decision, the CoA confirmed that:

  1. the “relevant person” is either (i) the occupier who is compelled to confer code rights or (ii) a person who is to be bound by the code rights conferred by the occupier;7
    and
  2. that the Tribunal “were correct to hold at [71] that whether a person is an occupier for the purposes of the Code is “a question of fact rather than legal status; it means physical presence on and control of the land.”

As the case heard in the Tribunal had “proceeded on the agreed basis that Vodafone was in occupation” and that there had been no interrogation during the Tribunal hearing as to whether this was factually correct or not,8 the CoA could not examine the facts to assess whether Vodafone did, on the facts, meet this criteria. It had to proceed on the basis of the Tribunal’s finding (i.e. that Vodafone was the “occupier” who could confer code rights).

The Exception:

Whilst Cornerstone appealed the “relevant person” test formulated by the Tribunal, it was common ground between the parties that the exception identified by the Tribunal in paragraph 82 of the judgment was correct, namely that an operator who had Apparatus on land, could rely upon the Code to obtain a renewal agreement. Accordingly, no submissions were made by either party about Part 5 (including paragraph 34) of the Code, how it was to operate and when it does and does not apply; indeed it was not applicable on the facts in any event. The discussion by LJ Lewison at paragraphs 57-66 of the Code therefore came as a surprise.

In seeking to explain how an operator in situ may use the Code to seek a renewal and departing from the surrender and re-grant argument proposed by the Tribunal, LJ Lewison relied upon the “deeming provisions” contained in the Code itself. He explained how:

  1. “The Code clearly envisages that a sitting operator may enter into an agreement conferring new or varied code rights;”9

Renewal and variations of code rights

  1. “In the case of the renewal of code rights it is not necessary for the person who confers the new (or modified) code rights to be an occupier ….. In many cases an application by an operator in situ need not be made under paragraph 20; but may be made under paragraph 34;”10
  2. That, where an application under paragraph 34 of the Code has been made, it does not matter whether the operator is also the occupier; the deeming provision contained in paragraph 34(8) treats a Part 5 agreement ordered by the Tribunal “as if” it were a consensual agreement under Part 2 of the Code (i.e. “as if” it were made between the operator and the occupier in accordance with paragraph 9);11

Interim and temporary code rights

  1. That where an application is made by an operator for interim code rights under paragraph 26 of the Code or for temporary rights under paragraph 27 of the Code, another deeming provision comes to the operator’s rescue – paragraphs 26(4)(b) and 27(4)(b). Both of these provisions incorporate paragraph 22 of the Code which states:

“An agreement imposed by an order under paragraph 20 of takes effect for all
purposes of this code as an agreement under Part 2 of this code between the operator and the relevant person.”

So, LJ Lewison concluded “for this purpose only, the landowner upon whom the agreement is imposed is treated as if he were the occupier, whether or not he is in fact the occupier.”12

How was this interpreted by the Tribunal in the Ashloch case

This case dealt with the “exception” recognised by the Tribunal and the Court of Appeal: a sitting operator who wished to renew its agreement.

In this case Cornerstone had a lease which had contractually expired and was continuing by virtue of the 1954 Act. Part 5 of the Code was not available since 1954 Act protected agreements are expressly excluded from Part 5 by virtue of paragraph 6 of Schedule 2 of the Digital Economy Act 2017 (“the Transitional Provisions”). So the question arose – does an operator with a 1954 Act agreement renew pursuant to the 1954 Act, paragraph 20 of the Code or alternatively are both routes available?

The decision of the Tribunal

The Tribunal held that the Compton Beauchamp decision was “the real issue”13 in this case. Whilst recognising that the CoA “was not specifically concerned with the question whether there is jurisdiction to require a freeholder to confer Code rights on an operator which is itself in occupation of the land,”14 that decision presented Cornerstone and other operators alike, with an insurmountable obstacle.”15

The Deputy President, in deciding that Part 4 of the Code (which includes paragraph 20) was not available to an operator with a 1954 Act agreement, explained that it was not possible to interpret the following passage of Lewison LJ’s judgment:

“the renewal of rights by an operator in situ in not primarily governed by Parts 2 and 4. Rather it is governed (at least principally) by Part 5”16

“as allowing Part 4 to confer on an operator in situ much wider and more general rights of renewal than those provided by Part 5 … Part 5 is aptly described as the “primary” right of renewal for such an operator because of the limited exception in which Part 4 is available to an operator in situ . The extent of that exception was identified and explained by Lewison LJ at [67]-[74]; it is concerned only with interim and temporary code rights under paragraphs 26 and 27. At [68] Lewison LJ recognised that it is a precondition of an application to impose interim and temporary Code rights that the operator must have given a notice under paragraph 20.”17

The Tribunal concluded that:

“An operator in situ under a subsisting agreement is in the same position as an operator in situ under an agreement made under Part 2 or imposed under Part 4; that status does not confer the right to give notice under paragraph 20, except for the very limited purposes of obtaining interim and temporary rights.”18

If an operator does not have a subsisting agreement (i.e. a written agreement that was in force as at the date the Code came into force) then:

“It should come as no surprise that the transitional provisions leave operators without the full benefits of the new Code and reliant instead on their pre-existing rights…. A tenant in occupation under an oral agreement would have enjoyed no rights under the old Code, nor was it the purpose of the Code to confer additional rights on operators pending the expiry or renewal of their old agreements.”19

Commentary on the two decisions

The New Code was introduced to make it easier and cheaper for operators to “deploy and maintain their infrastructure”20 yet these decisions seem to fly in the face of Government’s intentions.

The “occupier” test:

The “occupier” test formulated by the Court of Appeal in Compton Beauchamp will make it more difficult for the parties to determine who should confer and be bound by code rights. A detailed factual enquiry may need to be undertaken to determine who is both (i) physically present on the land and (ii) has factual control of that land. This also means that potentially more of precious Tribunal resource may be needed to determine this issue and that only leads to one thing – more costs for the parties involved.

The operator in situ

The effect of these two decisions, and in particular the Tribunal’s interpretation of the Compton Beauchamp decision, is difficult to reconcile with the express language of the Code.

Firstly, it is difficult to see how paragraph 22 comes to the rescue for applications made under paragraph 26 and 27 but not for applications under paragraph 20 where paragraph 22 expressly refers to paragraph 20.

Secondly, to infer that paragraph 20 is not available to an operator in situ who is potentially facing possession proceedings is at complete odds with:

  1. paragraph 40(8) of the Code which expressly states that the Tribunal is not permitted to make a removal order if an application under paragraph 20(3) has been made and has not yet been determined;
  2. paragraph 27 of the Code which:
  1. makes it a precondition that a paragraph 20 notice is given;21 and
  2. states that a paragraph 27 order takes effect until proceedings under paragraph 20 and any proceedings under paragraph 40 have been determined;22 and
  1. the position under the Old Code - the removal proceedings under Old Code paragraph 21 has now been replaced with paragraph 40 of the New Code and the right for an operator to defend itself against such proceedings by seeking a new agreement under paragraph 5 of the Old Code has now been substituted for paragraph 20 of the New Code.23

Indeed, in the subsequent decision of the Court of Appeal in Cornerstone Telecommunications Infrastructure Limited and The University of London [2019] EWCA Civ 2075, the judges, in recognising that the distinction in language between paragraph 26 and 27 of the Code was not referred to in Compton Beauchamp,24 clarified that:

“Paragraph 27, by contrast, operates in the context of an application for an agreement conferring code rights under paragraph 20. The operator’s security will continue until the determination of that application.”25

The story does not end there. Cornerstone has been given permission to appeal the Compton Beauchamp case to the Supreme Court and the Ashloch case to the Court of Appeal. Watch this space…

Carlos Pierce is Head of Legal Projects, Strategy and the Code programme, and Tina Middleton is 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] Department for Culture Media & Sport “A New Electronic Communications Code” May 2016, per Ed Vaizey – Minister of State for Culture and the Digital Economy. [2] Cornerstone Telecommunications Infrastructure Limited and Compton Beauchamp Estates Limited, per Martin Roger QC at para 66. [3] I. [4] Ibid, per para 71. [5] Ibid, per para 73. [6] Ibid, per paragraph 82. [7] Cornerstone Telecommunications Infrastructure Limited and Compton Beauchamp Estates Limited [2019] EWCA Civ 1755, per Lord Justice Lewison at paras 31-32.  [8] Ibid, at paras 76-79. [9] Ibid, per para 57. [10] Ibid, per para 61. [11] Ibid, per para 62. [12] Ibid, per paras 73-74. [13] Cornerstone Telecommunications Infrastructure Limited and Ashloch Limited and AP Wireless II (UK) Limited, per Martin Roger QC at para 60. [14] Ibid, per para 62. [15] Ibid, per para 87. [16] Cornerstone Telecommunications Infrastructure Limited and Compton Beauchamp Estates Limited [2019] EWCA Civ 1755, per Lord Justice Lewison at 60. [17] Cornerstone Telecommunications Infrastructure Limited and Ashloch Limited and AP Wireless II (UK) Limited, per Martin Roger QC at para 73. [18] Ibid, per para 87. [19] Ibis, per paragraph 91. [20] Department for Culture Media & Sport “A New Electronic Communications Code” May 2016, per Ed Vaizey – Minister of State for Culture and the Digital Economy. [21] Paragraph 27(1)(a) of the Code. [22] Paragraph 27(3) of the Code. [23] See also paragraphs 11 and 12 of the Transitional Provisions. [24] Cornerstone Telecommunications Infrastructure Limited and The University of London, per Sir Terence Etherton MR, Lord Justice Lewison and Lord Justice Arnold, per para 72. [25] Ibid, per paragraph 74.

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