True Intentions? Contrived redevelopment schemes will not defeat Code rights.

Bryan Cave Leighton Paisner
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Summary

A landowner cannot contrive a redevelopment scheme to prevent an operator acquiring Code rights,  if the scheme’s only purpose is to obstruct Code rights.

The recent case which decided this follows the trend of operator-friendly decisions on the new Electronic Communications Code (the ‘Code’), and adopted 1954-Act case principles.

Where a landowner relies on its proposed redevelopment to resist Code rights, the new acid test is whether the landowner would intend to do the same works if the Code rights were not being claimed. If not, the Tribunal can impose Code rights, which would allow telecommunications operators to use the site on favourable terms.

The Upper Tribunal adopted the same approach taken by the Supreme Court in the game-changing 1954 Act case: Franses v Cavendish [2018]. In that case, a landlord’s ‘conditional’ intention to redevelop, but only if required to recover possession from a business tenant, was insufficient. A new acid test was born: would the landlord still do the works if the tenant left voluntarily?

Franses was not binding on the Tribunal, but it was held to be relevant to the Code.

EE Limited And Hutchison 3G UK v Meyrick 1968 Combined Trust Of Meyrick Estate Management [2019]

The landowner proposed to put up their own masts in place of the operator’s existing ones. This was because Code rights cannot be claimed over electronic communications apparatus (including masts).  

So if the operator wanted to use the masts after the redevelopment, the Code wouldn’t apply, and the landowner could charge what they wanted and grant rights on terms they wanted, unconstrained by the restrictions of the Code (which allow operators rights on very favourable terms for minimal compensation).

The landowner had a reasonable prospect, including the financial means and planning permission, to carry out the intended redevelopment. This was not enough.

The Tribunal considered that the proposed scheme was financially unviable, and was not convinced that the landowner would waste resources on it (particularly given their obligations as trustees).

In any event, the ‘conditional’ intention (only to carry out redevelopment works to prevent Code rights) was not sufficient, for the same reasons given by the Supreme Court in Franses. Such an intention is not the unconditional intention Parliament sought to protect.

The Tribunal noted that the new Code must be looked at ‘with a clean slate and as a fresh start’ but recognised that 1954 Act case law principles should be adopted where they are relevant and this included Franses.

Other relevant 1954 principles include that the time for proving intention is the date of the hearing, and that the intention must be firm and settled (so must have moved “out of the zone of contemplation… into the valley of decision” ).

The Tribunal will bend over backwards to impose Code rights wherever possible, reflecting the Code’s purpose: better connectivity for all.

Landowner’s redevelopment plans and motives will be scrutinised, to check that schemes are genuinely intended and not contrived to defeat Code rights.

Landowners who genuinely intend to redevelop (irrespective of any Code rights claimed), will still be able to resist Code rights being imposed.

[View source.]

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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