Can you defeat the 'code' by building your own mast?
Last week saw the Upper Tribunal (Lands Chamber) decide the latest hearing in respect of the new Electronic Communications Code (the “Code”) in EE Limited and Hutchison 3G Limited v Meyrick 1968 Combined Trust of Meyrick Estate Management.
EE and H3G were already in occupation of a mast on land in the New Forest owned by the Trustees of the Meyrick Estate. Their lease had expired and was excluded from security of tenure under the Landlord and Tenant Act 1954. Negotiations for a renewal lease were ongoing but had broken down following the landowner’s request for the operators to include a reinstatement obligation in the new lease. It was at this point that the tenant sought Code rights which the landowner opposed.
The case was brought to tribunal after EE and H3G, as operators, made a claim for Code rights under Paragraph 20 which was contested by the trustees on the grounds of Paragraph 21(5). Paragraph 21(5) states that “The court may not make an order under paragraph 20 if it thinks that the relevant person intends to redevelop all or part of the land to which the code right would relate, or any neighbouring land, and could not reasonably do so if the order were made.” The operators argued that the trustees had not demonstrated the necessary intention to redevelop to satisfy the condition in paragraph 21(5).
The trustees’ proposed development consisted of removing the operators’ mast, and replacing it with a new, taller mast (at significant expense). The trustees claimed that this was primarily to install equipment for the provision of fixed wireless access broadband to benefit the estate and also neighbouring properties. The operators would then be invited to install their equipment on the new mast for a fee. The trustees were seeking to take advantage of the fact that ‘electronic communications apparatus’ cannot be ‘land’ under the Code, and therefore if they built their own mast the operators would be unable to obtain Code rights over it. This is because operators can only obtain Code rights over ‘land’ as defined in the Code.
It was argued by the operators that they would not install equipment on a mast owned by an unregulated site provider, as an unregulated site provider is not familiar with the needs of the industry (in contrast to dedicated telecoms site providers) and that may have an adverse impact on an operators’ ability to make the best use of the sites.
In order for the trustees to succeed in their objection to the granting of Code rights, they had to satisfy a two-stage test. Firstly, they had to show an intention to carry out the development (subjective test) and, secondly, there must be a reasonable prospect of them being able to do so (objective test).
In this case, the trustees had ample financial resources to carry out the development (regardless of the fact the development appeared not to be financially viable) and had obtained planning permission to do so. However, they fell short of the requirements of the subjective test, as it appeared that their plans to carry out the redevelopment were merely a ploy to prevent the operators from gaining the desired Code rights which would in all likelihood dramatically lower the rent achievable from the site and further limit the control the trustees had over their land.
It was therefore decided that the trustees could not rely on paragraph 21(5) of the Code. A further hearing is yet to be listed to deal with the outstanding issues between the parties.
This decision will be music to the ears of operators who are looking to acquire Code rights, and will act as a deterrent for landowners looking to frustrate any similar application sought by their operator tenants in the future.
For more information on this topic, please contact Graham Jones, or you can give us a call on 0345 070 6000.
This article was prepared by Daniel Webb.
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