Michael Upton

It may seem axiomatic that rights to use or to occupy land must flow - directly or indirectly - from a present or past land-owner. But in the important field of telecoms operator’s rights to install and maintain electronic-communications apparatus, it may be a mistake to assume any such axiom applies. The issue arises in an appeal to the English Court of Appeal which is being heard this week.

The law specific to this is the new Electronic Communications Code, enacted by the Digital Economy Act 2017. The Code allows Ofcom-recognised operators to apply for compulsory rights to install apparatus on 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. If the Tribunal imposes an agreement, the agreement creates Code rights, the endurance of which is protected by the Code. So far, so simple. But agreement with whom? Against whom must an operator seek a Tribunal order?

Agreement can of course be reached voluntarily - but then the same question arises: if the operator is thus to obtain Code rights, with whom must it reach agreement? For example, with the legal proprietor? Or with a de facto possessor?

This is an issue in the Court of Appeal this week, in CTIL v. Compton Beauchamp Estates. It was decided by the Upper Tribunal on 3rd April this year: [2019] U.K.U.T. 0107 (L.C.). The operator, CTIL, sought a compulsory agreement with a land-owner. But as is not uncommonly the case, the site was already occupied by a telecoms operator - who had had a lease, which had expired. It remained on site: it maintained a telecommunications mast there, which it continued to use.

The Tribunal dismissed the application, holding it to be directed against the wrong person. It sought a compulsory agreement with the land-owner, but (said the Tribunal) it should have sought a compulsory agreement with the operator in possession.

The Tribunal was clear that in order for Code rights to be created over a site, whether by judicially-imposed agreement, or by voluntary agreement, it is sufficient that the agreement is with the de facto occupier of that site (judgment, para. 80).

May an operator in possession therefore validly apply to the Tribunal for a compulsory right against itself? The Tribunal could be taken to say ‘Yes’, where an operator is already in occupation under a judicial grant of interim or temporary rights, and applies to the Tribunal for a permanent right (para. 81).

May an operator in possession therefore spare itself the trouble of applying to the Tribunal, and simply grant itself a permanent right?

On the one hand, Compton Beauchamp might be taken to mean that Code rights can be judicially granted in an application by an operator against itself (para. 81) and that the relevant prerequisites for the judicial and voluntary creation of Code rights are the same (para. 80) - entailing that an operator in possession could simply grant itself a right.

On the one hand, the core provision at para. 9 of the Code is that “A code right in respect of land may only be conferred on an operator by an agreement between the occupier of the land and the operator” (emphasis added) - and one surely cannot enter into an agreement with oneself.

Of course, that difficulty could be avoided by an operator in possession granting a right to an associated company - provided that the latter was recognised by Ofcom as a telecoms operator.

The Tribunal seems also to have meant that the occupier’s agreement (or an order against the occupier) is not only one sufficient way to create Code right, but that it is also necessary: “it is necessary that the occupier should be involved in each case, whether voluntarily or by compulsion” (para. 80); “the rule laid down by paragraph 9 [is] that only an occupier may confer rights” (para. 81) (emphasis added).

But the Tribunal appears to mean that the necessity of dealing with the occupier flies off, and the voluntarily or compulsory agreement can validly be made with an non-occupier land-owner, where the applicant operator is in possession. In the case of voluntary agreement, it said that a land-owner and operator in possession could validly create Code rights by agreement because “Where the agreement is consensual … the operator will not be able to suggest that the site provider was not the occupier at the moment the agreement conferring the rights was entered into” (para. 82). In the case of a compulsory agreement, “The Tribunal can compel the grant of new rights by a site owner to an operator which is itself in occupation” - so the owner could not then be the occupier - “but it cannot compel the grant of rights by a person who is not in occupation to an operator who is not in occupation.”

That seems to mean that the occupier needs to be party to the agreement - or the subject of the Tribunal order - where the applicant operator is someone else. Non-occupying operators can and must deal with occupiers, but operators in possession can deal with non-occupying land-owners so as to get valid Code rights.

But can that be reconciled with “the rule laid down by paragraph 9 that only an occupier may confer rights” (para. 80)?

And does the power of the Tribunal to “compel the grant of new rights by a site owner to an operator which is itself in occupation” mean that ‘self-grant’ by such an operator in possession, or (less nonsensically) a grant by it to an associated business or a nominee (if recognised by Ofcom) - are not other sufficient means of achieving the same result?

If so, CTIL’s losing might be more apparent than real. It is a joint venture between Telefónica (02) and Vodafone - and the operator in possession of the site was Vodafone. All three are Ofcom-registered operators. Now CTIL are appealing. But they may equally have considered the option of simply asking their partner Vodafone to grant what the Tribunal refused them

(One caveat: rights of access or wayleaves over adjacent ground not already ‘occupied’ by an operator may of course raise different considerations.)

Does this mean that even one operator with a completely precarious title - equivalent in law to a squatter - can deal with another (or even with itself), so as to bind the land-owner?

In theory, although the land-owner may not be involved as a source of rights, he is not bound by a Code right granted by someone who was occupying his land without a title (Code, para. 10). However, that is ‘theory’, because the fact that a Code right does not bind a land-owner does not necessarily mean that he may have the operator or its apparatus removed.

There are important restrictions on rights to remove apparatus.

One of them is that as long as the occupier who granted the Code right remains in occupation, the land-owner cannot remove apparatus installed in the exercise of that Code right - unless the Code right was conferred in “breach of a covenant enforceable by the landowner” (para. 37(4)(a)).

Of course, if the occupier who granted the right has no title at all from the land-owner (or a predecessor in title), then there may be no “covenant” to be breached breach - and so no land-owner’s right of removal.

In the less improbable case of the occupier who gained possession under an earlier agreement with the land-owner which ended before the occupier granted the Code right - as in the case of an operator who has had a lease or licence which has run its course, but who thereafter remains in possession and uses its status as occupier to grant a new Code right - it will be necessary to examine the expired agreement to determine whether it contains a covenant against granting such subsidiary agreements.

Arguably an implied term would suffice, but at least during its currency a commercial lease generally has no implied restriction on sub-letting. Is it nonetheless an implied term of a commercial lease that, post-termination, the tenant will not purport to grant subsidiary rights - and is that enough of a covenant for its contravention to instruct a right of removal?

Here and elsewhere, the new Code provides much to discuss.