Latest Upper Tribunal Code Judgement
This week saw the Upper Tribunal (Land Chambers) decide upon another hearing with regard to the Electronic Communications Code (the “Code”) in Arqiva Services Ltd v AP Wireless II (UK) Ltd [2020[UKUT 195 (LC).
Summary of Case Facts
Following expiry of its unprotected lease in October 2016, Arqiva remained in occupation of a site, with its electronic communications apparatus, paying rent and other sums. Its customers also continued to operate from the site pursuant to licence agreements. For some months, Arqiva and AP Wireless were in negotiations for a new lease but no agreement was reached. The Code came into force on 28 December 2017 and on 02 July 2019, Arqiva served notices on AP Wireless pursuant to paragraphs 20 and 27 of the Code. In brief:
- paragraph 20 (imposing Code rights) is within Part 4 of the Code and pursuant to this paragraph, the court can impose an agreement by which a relevant person confers, or is bound by Code rights; and
- paragraph 27 (temporary Code rights) is again within Part 4 of the Code and enables an operator to apply for temporary Code rights where there is existing apparatus on the land and another person has the right to require its removal. The court can also order temporary Code rights when certain circumstances apply
Issues To Be Determined
The Upper Tribunal gave directions for the hearing of preliminary issues on 13 December 2019, by which time the judgements in both:
- Cornerstone Telecommunications Infrastructure Limited v Compton Beauchamp Estates Limited EWCA Civ 1755; and
- Cornerstone Telecommunications Infrastructure Limited v Ashloch Limited and AP Wireless II (UK) Limited  UKUT 338 (LC)
had been handed down. In light of these judgements, it was necessary for the Upper Tribunal to determine four issues:
- Arqiva’s status after 16 October 2016 – was Arqiva a tenant at will, a periodic tenant or a contractual licensee?
- Did Arqiva occupy under a ‘subsisting agreement’ when the Code came into force?
- Did correspondence between Arqiva and AP Wireless in the Autumn of 2019 have the effect of Arqiva becoming a contractual licensee for 5 years?
- Did the Upper Tribunal have jurisdiction to impose an agreement under paragraph 20 of the Code?
- The Upper Tribunal held that Arqiva is a tenant at will.
- Having determined that Arqiva is a tenant at will, the next question was whether it is a tenant at will pursuant to a ‘subsisting agreement’ with the answer dictating whether the Upper Tribunal had jurisdiction to make an order under Part 5 of the Code (termination and modification of agreements).It was held that an unwritten tenancy at will was not a ‘subsisting agreement’. It was a new tenancy created in October 2016 albeit on the same terms as the expired unprotected lease (so far as relevant and consistent with a tenancy at will).
- It was held that notwithstanding the correspondence between Arqiva and AP Wireless in the Autumn of 2019 and in which reference was made to Arqiva being granted a five year contractual licence, this did not have the effect of Arqiva becoming a contractual licensee for 5 years and Arqiva remained a tenant at will.
- The outcome of the above 3 issues means that Arqiva remained in occupation of the site, with its electronic communications apparatus, without 1984 Code rights and without Code rights. The Upper Tribunal held, with extreme reluctance, that the effect of the Court of Appeal’s interpretation of the Code in Compton Beauchamp was that an operator in occupation of land without Code rights could not make an application under paragraph 20 and therefore, the Upper Tribunal had no jurisdiction to impose a paragraph 20 agreement in favour of Arqiva. The Upper Tribunal was bound to follow the judgement in Compton Beauchamp notwithstanding the practical effect this has on significantly reducing the benefit and effect of paragraph 27. The Upper Tribunal did comment that the judgement was extremely unsatisfactory and in its view, inconsistent with the policy of the Code and wreaked ‘violence’ to paragraph 27.
Effect of Judgement
All in all, the judgement places Arqiva and other operators in similar situations in a rather vulnerable position. How many operators remain on site with their electronic communications apparatus, following expiry, before 28 December 2017, of their 1984 Code agreements, as tenants at will?
Even if the Upper Tribunal had held that Arqiva is a periodic tenant, this would not have helped following the judgement in Ashloch. Although periodic tenancies benefit from protection afforded by the LTA 1954, such protection means that neither Part 4 nor Part 5 of the Code are available to operators and given a periodic tenant cannot give notice under section 26 of the LTA 1954 to initiate LTA 1954 renewal proceedings and obtain a new lease, this leaves operators ‘high and dry’ and in a rather precarious position or as the Upper Tribunal said ‘shut out’ from the Code.
Practically, the effect of this and previous judgements could and is detrimental to telecoms network coverage and in particular, the roll-out of 5G.
The Upper Tribunal has indicated that leave to appeal the decision will be granted so I’ve no doubt, that this is not the end of the story but possibly only the beginning
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