On 21 August 2020 Judgment in the anticipated case of Vodafone Limited –v- Hanover Capital Limited [2020] EW Misc 13 (CC) was handed down by Martin Rodger QC sitting at the County Court of Manchester (in the Upper Tribunal).
The case concerned the renewal of a subsisting agreement under the Code which also had protection under the Landlord & Tenant Act 1954 (the Act).
The parties agreed that the lease should be renewed using the procedure set out in the 1954 Act but couldn't agree on the length of term of the new lease or the basis on which the rent was to be valued.
Vodafone argued that the rent should be determined in accordance with the 'New Code' valuation i.e. using the 'no-network' method. The landowner argued that the value to the operator should be used as the basis for determining the rental value.
The Court held that the rent should be valued by reference to a hypothetical transaction taking into account the tenant's potential rights under the Code and the possibility of competitive bidding. The court also made it clear that this approach may not be applicable to sites 'which would not be of interest to competitors' in which case consideration may be based on the value of the site to the owner instead.
With regards to the term, the court ordered 10 years with a six month rolling break exercisable after 5 years. The Operator had asked for 3 years with a 6 month rolling break and the landlord for 10 year with a 5 year break clause. It was noted by the court that a minimum certain term of 5 years was common practice in the industry.
Although not binding, this case is likely to bring some much need clarity to the area and assurance to landowners who may have previously been pressured by operators to accept rent lower than they are entitled.
