The Court of Appeal has recently provided much needed clarity on which parties have the right to renew (or terminate) a telecoms lease under the Electronic Communications Code.
In the case of Vodafone Ltd v Potting Shed Bar and Gardens Ltd a dispute arose as to who had the right to renew a telecoms lease granted to Vodaphone by the previous freeholder. Paragraph 10 of the Electronic Communications Code (the Code) sets out the parties who are bound by the code rights associated with any code agreement. Parties bound by an agreement include the original parties but also their successors in title (by para 10(2)(a)) and other parties who have an interest in the land (by para 10(2)(b) and (c)). However, to renew or terminate a lease, notices must be served on 'parties' to a code agreement, and paragraph 10(3) states that a successor-in-title by virtue of para 10(2)(a) is a party but does not refer to those who have an interest pursuant to paragraphs 10(2)(b) or (c).
Here, the freeholder had, subsequent to granting a lease to Vodaphone, granted a 'concurrent lease' to AP Wireless II (UK) Limited (APW). APW thus in effect had an intermediate lease and became Vodaphone's landlord. They were bound by the Code in accordance with para 10(2)(b) rather than para 10(2)(a) and hence not, on the face of it, a 'party' to the agreement.
For the purposes of notices served to renew or terminate a code agreement, such notices may only be served on or by a party to the agreement. But equally, under paragraph 9, code rights may only be conferred between an operator and the 'occupier' of the land. APW was the occupier but not apparently a party to the agreement, leaving Vodaphone in a bind as to whom it could serve notice on.
The issue of who can or cannot apply for renewal of a code agreement is one which has previously caused a similar stalemate requiring the intervention of the court. In Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd the question was whether an operator who was already in occupation of land could apply for new code rights. If the operator is itself the occupier, then, as it cannot agree code rights with itself, it is prevented from acquiring new code rights until its occupation has ceased. In this case, the court sought to give effect to the clear intention of the Code by distinguishing between an operator seeking code rights, and an operator as an occupier, and held that an operator seeking code rights could agree them with the freehold owner of the site notwithstanding that it occupied the site.
In this case, a similarly pragmatic judgment has been handed down, with the court holding that while para 10(3) explicitly refers to successors-in-title, this was not an exclusive definition, and that a party to a code agreement must include any party that had the benefit and the burden of the agreement regardless of whether they were or were not a successor-in-title of an original party.
This is an important and practical decision for developers, who are often granted a concurrent lease for development purposes. This judgment confirms that such a tenant will be a 'party' to any code agreement granted prior to their lease, and will therefore have the rights to terminate such agreements on development grounds.
