The Supreme Court clarifies occupier status after a wrong turn

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In this article, we take a look at the Supreme Court's judgment in Cornerstone Telecommunications Infrastructure Ltd (Appellant) v. Compton Beauchamp Estates Ltd (Respondent); Cornerstone Telecommunications Infrastructure Ltd (Appellant) v. Ashloch Ltd and another (Respondents); and the Court's decision to call for further submissions in On Tower UK Ltd (formerly known as Arqiva Services Ltd) (Appellant) v. AP Wireless II (UK) Ltd (Respondent) [2022] UKSC 18.

Introduction

On 22 June 2022, the Supreme Court handed down its judgment in two of three much-anticipated telecommunications cases that were considered simultaneously. We refer to these as (1) the Compton Beauchamp appeal; (2) the Ashloch appeal; and (3) the On Tower appeal. This is a helpful summary of the key issues considered and conclusions drawn in the judgment. 

Background

The appellants in the three appeals were operators of mobile telecoms networks that had installed electronic communications apparatus (ECA) on the respondents' land pursuant to agreements under the Old Code. Historically, it was not unusual for network operators to keep their equipment on the land long after their agreements had expired. As a result, their entitlement to keep their ECA on the land was precarious and so the appellants wanted to improve their security of tenure by applying for new code rights under paragraph 9 of the New Code. Paragraph 9 of the New Code provides 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."

The appellants argued that an operator with ECA on land is not an "occupier of the land" and should therefore be able to apply for new code rights. However, this was not a view with which the Court of Appeal agreed. At the appeal, the court had decided that an operator who had already installed ECA on the land was both the "operator" and "occupier of the land". On this interpretation, an entity cannot contract with itself to acquire new code rights under paragraph 9 of the New Code. Consequently, an operator would be unable to apply for new code rights under the New Code. 

The respondents – all site owners – maintained that the operators can only change their existing rights (which were granted under the Old Code) once Part 5 of the New Code applied to them i.e. only when the agreement granting these existing rights comes to an end. Consequently, they argued that the operator cannot apply for new rights under the New Code until then. The Court of Appeal agreed with this view. 

In this appeal then, the Supreme Court considered:

  • whether and how an operator who has already installed ECA on a site can acquire new or better code rights from the site owner; and
  • whether, in determining who is an "occupier of the land" for the purpose of paragraph 9, the word "occupier" includes an operator who has ECA on the land.

Who is an "occupier of the land"?

Starting from the proposition that the word "occupier" has no fixed meaning, the Supreme Court held that meaning should be derived from the context in which the word is used. The court concluded that, under paragraph 9, the "operator" seeking code rights is different from the "occupier of the land". An operator on-site can therefore seek additional code rights in respect of the same land. In forming this conclusion, the court cited policy reasons, namely that government policy for to roll out digital infrastructure. Such policy would be impeded if operators were unable to apply for new code rights simply because their ECA is already installed on the same site.

The Supreme Court further considered that an operator already party to a code agreement may only apply to the Tribunal to modify the terms of its existing code rights under paragraph 5 of the New Code once this option becomes available to them. The court explained that this is because parties should generally be kept to the bargain to which they agreed, but noted that they could seek a consensual variation under paragraph 11 of the New Code. Notably, the court maintained that this does not prevent operators with ECA on-site from obtaining additional or new rights under paragraph 9 of the New Code in respect of the same land while their existing code agreement is continuing. 

What were the outcomes in the various appeals?

The Compton Beauchamp appeal was dismissed because the occupier was Vodafone and not Cornerstone, the operator who had applied for the rights. As such, Cornerstone's notice requesting rights under paragraph 20(1)(a) was served on the incorrect party. 

The On Tower appeal was allowed following the clarity given on the interpretation of "occupier". Since On Tower's occupation was to be disregarded, there was no other barrier to obtaining new code rights under paragraph 20 of the New Code. 

In the Ashloch appeal, the court concluded that the transitional provisions meant that an operator with a subsisting agreement protected under the 1954 Act does not have the option of renewing the rights under the New Code. The operator must instead exercise its rights under Part 2 of the 1954 Act. The court invited submissions from the parties in the Ashloch appeal on whether Cornerstone's application covered new rights or sought to renew existing rights under the 1954 Act. Once those further submissions have been given, the appeal will be determined.

Conclusion

This judgment is another win for telecommunications operators that will welcome the court's clarification on the status of code rights as they continue to roll out their digital infrastructure.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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