UK: The Electronic Communications Code 2017: Some Recent Cases

Last Updated: 24 September 2019
Article by Gareth Hale and Sarah Lynn Peock

The Electronic Communications Code 2017 (the Code) applies across the whole of the UK and it is therefore an area where English real estate case law can also be relevant in Scotland. This year we have seen a flurry of English cases on the Code. This alert looks at two of those cases and some of the interesting points arising for both landowners and operators.

In both cases, Cornerstone (a joint venture formed by Vodafone and Telefonica) sought an order from the Upper Tribunal (UT) to impose Code rights on landowners in relation to sites that continued to be occupied by Vodafone following the expiry of previous Code agreements.

Cornerstone Telecommunications Infrastructure Limited v. Keast [2019] UKUT 116 (LC) (Keast)

A number of preliminary issues came before the UT, of which the following were particularly interesting:

1. Can an operator seek Code rights over land on which there is already electronic communications apparatus (ECA)?

An operator can only seek Code rights over "land", the definition of which in paragraph 108 of the Code excludes ECA. This prevents one operator seeking to assert Code rights against another operator's ECA (instead, relations between operators are to be governed by private contract, subject to regulation by Ofcom).

As a matter of common law (north and south of the border), it is settled that where an object becomes sufficiently affixed to land it may, as a result, form part of the land itself. Using this principle the landowner argued that, because Vodafone's existing ECA was affixed to the site, it had become part of the land and therefore the operator was precluded from claiming Code rights against that land because it consisted of, in part, ECA.

The UT dismissed this argument. By virtue of paragraph 101 of the Code, any ECA installed pursuant to Code rights, no matter how firmly affixed to the land, does not by virtue only of that attachment become land. Accordingly, the operator was not seeking to assert Code rights against ECA.

The landowner then argued that, if the ECA did not form part of the land, the operator could only claim Code rights over such part of the site as was not occupied by the ECA. Again, this was dismissed by the UT, which held that "the prohibition of the acquisition of Code rights over ECA does not mean that it is impossible to acquire Code rights over land where ECA is present".

2. Does the UT have jurisdiction to impose positive obligations on a landowner when imposing Code rights?

The UT refused to rule that it was beyond its jurisdiction to impose positive obligations on a landowner when imposing Code rights. It did, however, acknowledge that "all draft terms can be considered a matter of discretion" and therefore the operator "may have an uphill struggle to persuade the tribunal that some of them are appropriate".

3. Could Cornerstone claim Code rights where Vodafone's lease of the site was continuing?

The UT deferred the issue of whether or not Cornerstone could claim Code rights where Vodafone's lease of the site was continuing. That issue was, however, in part, picked up in the next case with a slightly surprising outcome.

Cornerstone Telecommunications Infrastructure Limited v. Compton Beauchamp Estates Limited [2019] UKUT 107 (LC) (Beauchamp)

In this second case, the key issue was whether or not the UT had jurisdiction to confer Code rights on Cornerstone, as operator, in circumstances where the site in question was not occupied by the landowner, but was instead occupied by a third party, Vodafone.

Where Code rights are conferred by agreement, paragraph 9 of the Code makes it clear that they can only be conferred by the occupier of the land in question. Occupation is a question of fact and a legal right to possession will not be sufficient where another party is in actual occupation.

What was less clear was whether the same principle applied to Code rights imposed by the UT. The uncertainty arose because the relevant paragraph (paragraph 20) makes reference to an agreement being imposed upon a "relevant person" rather than an occupier.

The UT concluded that paragraph 20 "refers to a 'relevant person' not because an agreement to confer Code rights can be imposed on someone who is not an occupier but because two different types of order may be made by the tribunal" pursuant to that provision. The two types of order that can be made are the imposition of an agreement:

  • by which Code rights are conferred – this can be imposed on an occupier of the land in question; and
  • to be bound by Code rights – which can be imposed on someone else.

The UT clarified that this meant that it could "compel the grant of new rights by a site owner to an operator which is itself in occupation but it cannot compel the grant of rights by a person who is not in occupation to an operator who is not in occupation". Accordingly, the UT lacked jurisdiction to impose an order in this case on the site owner, conferring Code rights on the operator because the site owner was not in occupation.

Comments

These two cases raise some interesting questions about how the Code operates in situations where the site in question is occupied by ECA owned by a third party operator (although in both of these cases there was a connection between Vodafone and Cornerstone).

The decision in Keast that an operator can seek Code rights against a site on which ECA already exists will be encouraging to operators, while at the same time being disappointing to landowners. However, this decision needs to be reconciled with Beauchamp that an order can only be made against the occupier of land to impose Code rights. As such, going forward, in similar cases both operators and landowners will want to identify who is in occupation of the site. In addition, operators will need to carefully consider how they present their cases if they are going to maximise the chances of a successful outcome. In particular, they may need to engage the existing operator in those proceedings where that operator is the existing occupier. The Lands Tribunal for Scotland (which has jurisdiction for Code rights cases in Scotland) would be likely to find both these cases persuasive if determining a similar issue north of the border.

Note: This article is based on an article written by Neil Pemberton and Emma Broad in June 2019. You might also be interested in this article which describes an English case that considers the ability of landowners to resist the imposition of rights pursuant to the Code where they intend to redevelop their land. This case would also be relevant in Scotland.

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