Michael Upton: The new Electronic Communications Code – two new judgments
Advocate Michael Upton, M.C.I.Arb., of Hastie Stable, summarises two recent cases on the new Electronics Communications Code.
Relations between landlords and telecoms operators in respect of the installation and maintenance of electronic communications apparatus on land and buildings are in important respects governed by legislation. Until 2017 that was to be found in what was originally the Telecommunications Code in the Telecommunications Act 1984 (amended by the Communications Act 2003). Under the Digital Economy Act 2017, since the end of 2017 that has been replaced by the new Electronic Communications Code.
Under the new code, an operator may apply for compulsory rights to install apparatus on another person’s property. In England application is to the Upper Tribunal; in Scotland, to the Lands Tribunal. Where the tribunal grants an application, it does so by imposing a deemed agreement on the landlord. The new code re-wrote the conditions for such a judicial grant of compulsory rights. After 16 months’ operation of the new code, we are now seeing the first judgments. February saw the first decision about judicial evaluation of rent and lump-sum compensation (EE Ltd. v. Islington L.B.C.). Last month saw two more useful decisions. Both were brought by Cornerstone Telecommunications Infrastructure Ltd. (“CTIL”), which is a joint venture between Vodafone and Telefónica (02).
The first is CTIL v. Compton Beauchamp Estates Ltd. ( UKUT 0107 (LC); 3rd April 2019). As is often the case, the site at issue was already in use by a telecoms operator, although that was Vodafone, not CTIL as such. Vodafone’s lease had expired. The joint venture applied to the tribunal for an order against the land-owner for continued use of the site.
The tribunal dismissed the application - on the ground that under the new code the respondent required to be the current occupier. Here, de facto the occupier was not the respondent land-owner, but Vodafone, the expiry of its lease notwithstanding. The code could not be used to compel a grant of rights by a land-owner who was not in occupation. It was irrelevant that CTIL offered an undertaking by Vodafone not to defend an action for its removal.
It may have been frustrating to the joint venture to have its case rejected on the ground of possession by one of its partners. However, the Tribunal’s objection might not be incurable by dint of a second application in different terms. At all events the decision illustrates the need to be guided by the precise wording of the code, rather than any preconceptions about what might make sense.
The second case is CTIL v. Keast ( UKUT 116 (LC); 8th April 2019). This was another Vodafone site where the lease had expired without Vodafone removing; on application for new rights for CTIL the tribunal rejected a number of preliminary objections advanced by the land-owner. Some points of wider interest were made:-
1. For an operator to ask the tribunal for compulsory rights, it is a necessary condition that it first gave the respondent statutory notice of the desired rights. The tribunal observed, obiter, that while an operator will typically seek a number of rights, none can be granted that were not sought in a such prior notice. Conversely, the tribunal can be asked to grant less than was sought in the pre-action notice, but the exercise of its discretion may be affected if an operator has reprehensibly pressurised a land-owner with a wide-ranging notice only to abandon parts of it before the tribunal.
2. The Upper Tribunal said that, on the one hand, consideration payable under the new code is likely to be substantially lower than under the old code, but on the other hand that could affect the tribunal’s judgment about the nature or extent of the rights which it was appropriate to impose on a land-owner.
3. The judgment also usefully discusses accession of fixtures to heritage, and ownership of such items. Practitioners may be grateful where such matters are regulated by the code’s rules as thus clarified, where for all their complexity they are not as vague as the Scots common law of removal of large trade fixtures.
Keast also decides a point of general application: “subordinate legislation” within the meaning of the Interpretation Act 1978 embraces instruments made under legislative authority, even though they are not themselves “legislation”, such as OFCOM’s authorisation of a company as a code operator, by a “direction” made under the 2003 Act.
In both Compton Beauchamp and Keast, the Upper Tribunal specifically has emphasised the need for close reading of the code, by reiterating a fundamental constitutional principle. As it was put in Compton Beauchamp (paras. 86-87): “the Code … involves the imposition … of intrusive rights on unwilling parties. It is properly regarded as a variety of compulsory acquisition and … should attract the same cautious approach to its interpretation … [Lord Collins said in] the Supreme Court in R. (Sainsbury’s Supermarkets Ltd.) v. Wolverhampton City Council … ‘The courts have been astute to impose a strict construction on statutes expropriating private property …’ and referred also to Prest v Secretary of State for Wales … in which Lord Denning M.R. said that it was ‘a principle of our constitutional law that no citizen is to be deprived of his land by any public authority against his will, unless it is expressly authorised by Parliament …’ [In the Australian case of] R. & R. Fazzolari Pty. Ltd. v. Parramatta City Council … French C.J. said … ‘where a statute is capable of more than one construction, that construction will be chosen which interferes least with private property rights.’” That Supreme Court authority is of course equally binding in Scotland.