Landowners Beware of the Electronic Communications Code 2017

Year Published: 2019

The Electronic Communications Code 2017 (‘the Code’) controls the relationship between landowners and companies who run communication networks through cables and masts. This new code has generated more litigation in two years than the previous code had in over 20 years. In part, this is due to the telecoms firms exploring the extent of their new rights under the Code and in part due to landowners seeking to defend their position. There have already been five cases in 2019 to date, detailed below.

Case 1: Compensation Issue

In EE Limited v Islington LBC, the court had to apply the new compensation provisions of the Code. When determining compensation, the Court is required by the Code to ignore the interest of the telecoms operator in the site which, as expected, resulted in a lower level of compensation. Although the Court decided not to award merely nominal compensation of £50 per annum, the Court felt that the correct amount of compensation should be £1,000 per annum. In fact, the landowner was awarded £2,551 per annum, as that was the sum that the telecoms provider (EE Limited) had offered before the hearing.

This case is significant because the figure the Court had in mind was much lower than both parties had expected and this may significantly affect the sums offered to landowners in the future.

Case 2: Clutching at StrawsTelecom mast

The case of Cornerstone Telecommunications Infrastructure Limited (‘Cornerstone’) v Keast concerned a site that was subject to a lease in favour of Vodafone which expired in 2015.

Cornerstone wanted to acquire rights under the Code for both Vodafone and Telefonica. The landowner tried to rely on several technical legal points to deny Cornerstone the rights it was seeking. All of the landowner’s arguments were rejected at a preliminary hearing.

An argument that Cornerstone was seeking different rights at the hearing to those set out in its notice was given short shrift by the Court. The Court also found that Cornerstone, in the hope of keeping apparatus on the land, was seeking rights over land – which is permitted under the Code – and not rights over electronic communications apparatus – which is not permitted.

Applying the Code, the Court found that, however firmly the phone mast had been attached to the land, it had not become part of the land. The Court also found that there were no restrictions on the terms that it could impose under the Electronic Communications Code. Finally, the Court found that Cornerstone was entitled, under the various statutory provisions, to apply for the Code rights that it was seeking.

The lesson from this case is that the Court will not allow ‘clever’ technical arguments to prevent telecommunications operators acquiring the rights that they need to operate their businesses, as Parliament intended.

Case 3: Tripping Up Operators

The only ray of sunshine for landowners has been Cornerstone v Compton Beauchamp Estates.

In this case, Cornerstone wanted to impose an agreement on the landowner where another operator, Vodafone, had apparatus on the land following an earlier lease that had expired. Negotiations for a new lease had stalled and the landowner served a notice on Vodafone to terminate any tenancy at will that had been created and to require removal of the apparatus. The Court found that, under the Electronic Communications Code, it did not have power to grant rights to Cornerstone.

First, the landowner was not in a position to grant rights to Cornerstone because it was not in occupation of the land.  Vodafone were in occupation and had Code rights.

Second, the Court could only grant rights to Cornerstone if this was subject to Vodafone voluntarily giving up its rights and Cornerstone had not asked for the order in those terms. The Court applied a strict interpretation of the Code which, on the facts of this case, benefitted the landowner.

Telecoms operators are likely to learn from this case and will make provision for the termination of existing operator’s rights when applying for orders in the future.

Case 4: Wasted Costs

In Cornerstone v Central Saint Giles Partner Limited, a freeholder and its tenant took a telecoms operator to Court to try to recover the costs they had incurred arising from a dispute. The dispute in question concerned access to the property to carry out a survey and the terms of an indemnity provided by the operator.

The Court was unhappy with the way all the parties to the case had conducted the matter and only allowed the freeholder and the tenant costs of £5,000 each despite the parties’ total costs exceeding £100,000. The telecoms operator was criticised for the wide terms on which it had sought access and the landowners were criticised for their obstructive behaviour in seeking to deny the operator access.

The lesson from this case is that it pays to be reasonable.

Case 5: Redevelopment Woes

In EE and Hutchinson 3G UK Limited v Meyrick 1968 Combined Trust of Meyrick Estate Management, a landowner failed to stop a telecoms operator claiming Code rights when it said it intended to redevelop the land. The Court adopted the two-stage test, used in cases where a landlord opposes the grant of a new tenancy (under the Landlord & Tenant Act 1954) because it wants to redevelop its property.

The first test is objective – does the landowner have a reasonable prospect of being able to carry out the development? (the landowner passed this test). The second test is subjective – does it have a firm, unconditional and settled intention to redevelop? (the landowner failed to satisfy this test).

This is another example of the Court being unwilling to allow a landowner to use false grounds to stop a telecoms operator claiming Code rights.

Direction of Travel

Unsurprisingly, the early Court cases demonstrate that the Electronic Communications Code favours the interest of telecoms companies over landowners. The Code can however, trip up operators and landowners should seek expert advice if served with a notice to check their rights and the validity of any notices received.

For further information, please contact agricultural law specialist Stewart Smith in SAS Daniels’ Commercial Property team at [email protected] or phone 01244 305919.

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