The Cornerstone cases: the Court's jurisdiction on Code rights

The Cornerstone cases: the Court's jurisdiction on Code rights

The Cornerstone cases: the Courts jurisdiction on Code rights

The Electronic Communications Code (“the Code”) came into force on 28th December 2017 and it is incorporated into the Digital Economy Act 2017. At the time of its introduction, many landowners were concerned by the potential wide scope of rights which could be available to telecoms operators under the Code and the restrictions this might have on their ability to deal with their land as they choose.

 

So what are the Code rights? These are rights which permit an electronic communications operator (“Operator”) to:

  • install electronic communication apparatus (“Apparatus”) on, under or over land;
  • inspect, maintain, adjust, alter, repair, upgrade or operate the Apparatus;
  • carry out works on land for or in connection with:
    • the installation of Apparatus on the land or elsewhere; and
    • the maintenance, adjustment, repair or operations of the Apparatus on the land or elsewhere
  • connect to a power supply;
  • interfere with or obstruct an access to land; or
  • lop or cut back trees and other vegetation which may or will interfere with the Apparatus.

These Code rights can only be granted to an Operator who has obtained a direction from Ofcom that the Code applies to it. Such an Operator can then acquire Code rights either by a written agreement with the relevant occupier of the land or by an agreement imposed by court order.

The Code has been in force for just under two years and we are now starting to see the first few court judgments on its application and the conferral of Code rights. Most notably we have had the first Court of Appeal judgement in the case of Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates [2019] UKUT 107 (LC) (“the Compton case”).

The Compton case follows a number of Upper Tribunal (Land Chambers) decisions which are starting to provide useful clarity on the interpretation of the Code and the extent of the Court’s jurisdiction in conferring Code rights.

The Keast case

One recent Upper Tribunal case involving Cornerstone Electronic Communications Infrastructure Ltd (“Cornerstone”) is the case of Cornerstone Electronic Communications Infrastructure Ltd v Keast [2019] UKUT 116 (LC) (“The Keast case”).

Cornerstone is a company owned equally by Vodafone Ltd (“Vodafone”) and Telefonica (“O2”) and was established to manage the sharing of sites and infrastructure by Vodafone and 02.

The Keast case concerned an application by Cornerstone which was seeking to acquire Code rights over Penrose Farm in Cornwall owned by Keast. This land was already occupied by Vodafone pursuant to a lease protected by the Landlord and Tenant Act 1954, the contractual term of which had expired in 2015. Keast was unwilling to grant Code rights to Cornerstone and so the parties sought a ruling on a number of preliminary issues of law, namely:

  • whether Cornerstone was entitled to seek the rights it was claiming given that Vodafone’s lease was in place;
  • whether the rights which Cornerstone sought in making their application to the Upper Tribunal were different from the rights which it claimed in its paragraph 20 notice requesting the conferral of Code rights;
  • whether Cornerstone was seeking Code rights over electronic apparatus which the Upper Tribunal were not able to confer under the Code; and
  • whether Cornerstone was seeking rights outside the scope of the Code, which the Upper Tribunal were unable to confer.

The court ruled in favour of Cornerstone on all these issues, but what it omitted to deal with in any detail was whether the Upper Tribunal, under the terms of the Code, has jurisdiction to require a freeholder who is not in occupation of land to confer Code rights on an Operator at a time when there is another Operator in occupation of the land exercising Code rights.

This was at the crux of the Compton case.

The Compton case

The Compton case, which is the first judgement relating to the Code to come out of the Court of Appeal, involved an unusual set of facts in which Cornerstone were attempting to acquire Code rights over a small parcel of farmland which was already occupied by Vodafone pursuant to an existing lease.

In trying to acquire Code rights, Cornerstone, with the consent of Vodafone, had served notice under paragraph 20 of the Code on the freeholder, Compton Beauchamp Estates (‘Compton’), which is a formal notice seeking agreement to the conferral of Code rights. Cornerstone then made a referral to the Upper Tribunal to request that Compton confer Code rights on Cornerstone.

Despite the fact that Compton was the freehold owner of the land in question, the Court of Appeal upheld the Upper Tribunal’s judgement that Compton was not the “relevant person” under the Code on which notice requesting the conferral of Code rights should have been served. Notice should have been served on Vodafone as the “occupier” of the site pursuant to its lease. Lord Justice Lewison stated that the question of who is the “relevant party” is “a question of fact rather than legal status” and that in making a decision, it was correct for the court to give consideration to the physical presence on and control of the land, as opposed to just purely legal status.

On this basis the Court of Appeal upheld the Upper Tribunal’s decision that it did not have the jurisdiction to grant Code rights over the land to Cornerstone.

The implications of the Compton case for landowners and Operators

The judgment is, on the face of it, relatively surprising given that Compton was the freehold owner of the land and Vodafone’s landlord, yet it was not the “relevant person” to confer Code rights on Cornerstone.

The case does therefore provide clarity on the “relevant person” test and demonstrates that it is essential to establish who is in occupation of the land to establish who the “relevant person” is for the purposes of the Code and the conferral of Code rights.

The decision is likely to provide assurance to landowners given the court’s strict application of the Code, suggesting that the court is not willing to confer Code rights where the specific requirements of the Code have not been met by the Operator.

It too demonstrates the difficulty for Operators trying to transfer Code rights between related entities while ensuring continuity of service. That said, this is unlikely to be a mistake an Operator will make again; as Lord Justice Lewison said, there is nothing to stop Cornerstone and Vodafone entering into a separate agreement for the conferral of Code rights and then seeking Compton’s agreement to be bound by the agreement. If this approach is followed and Compton still refuse to be bound by the agreement then Cornerstone can seek an order from the Upper Tribunal.  

This paves the way for Operators going forward and we suspect that this will be an approach adopted by Vodafone and O2 (through their joint ownership of Cornerstone) as they look to consolidate a number of their individual sites in the future.

Contact our experts for further advice

James Thomas, View profile for Clare StrachanClare Strachan

Search our site