This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.
Set out in Schedule 2 of the Telecommunications Act 1984 is the Electronic Communications Code (the Code). The Code is an unclear and confusing piece of legislation which is unhelpfully coupled with little guidance (either by way of judicial guidance or set out in the legislation itself) to assist with its interpretation and application.
The Code gives operators of electronic communications services licensed by Ofcom the ability to acquire rights to install, inspect and maintain electronic communications apparatus and equipment (the Apparatus) on public and private land.
Paragraphs 20 and 21 of the Code set out the circumstances in which a landowner can require the removal, or alteration, of Apparatus on their land.
Paragraph 20
If a landowner requires the alteration of the Apparatus (which can include removal) it can serve notice under paragraph 20 of the Code. Paragraph 20 of the Code can only be used where the landowner wants to carry out a redevelopment or improvement of its land and requires the removal or alteration of the Apparatus to carry out that redevelopment or improvement.
Where notice is served under paragraph 20 of the Code the landowner must pay the operator’s costs of removing or altering the Apparatus. There is no guidance on how far these costs extend – i.e. could they extend as far as loss of profits for any downtime for that part of the network, or do the costs relate just to the actual costs of moving or removing the Apparatus? The extent of the provision has not been truly tested.
Paragraph 21
A paragraph 21 notice can be served by a landowner where the Apparatus is to be removed, but only where the person is entitled to "require the removal".
It has been suggested a landowner is not entitled to "require the removal" of the Apparatus until the tenancy or agreement under which the Apparatus is installed has come to an end.
Counter-notices
Under both paragraphs 20 and 21 of the Code an operator can serve a counter-notice within 28 days of a notice. If a counter-notice is served the landowner is unable to require the operator to remove the Apparatus without a court order.
Under paragraph 20 of the Code the landowner must prove to the court that the alteration:
- is necessary to enable the landowner to carry out the proposed improvement of its land; and
- will not substantially interfere with any service provided by the operator's network.
Under paragraph 21 of the Code, if a counter-notice is served the court cannot order removal of the Apparatus unless it is satisfied that either the operator is not intending to take steps to secure a right against the landowner to keep the Apparatus on the land, or that the steps the operator is intending to take will not be successful in giving the operator the right to keep the Apparatus on the site.
These provisions effectively give operators a form of security of tenure that enables them to keep Apparatus on site even in circumstances where a tenancy agreement has expired.
This is obviously very similar to the Landlord and Tenant Act 1954 (the 1954 Act) which grants tenants occupying premises for the purposes of a business security of tenure.
Crest
In Crest Nicholson (Operations) Services v Arqiva Services [2015] Cambridge County Court had to deal with the conflict between the security of tenure provisions under the 1954 Act and the Code.
The operator’s lease was protected by both the 1954 Act and the Code. The landowner wanted to redevelop its land and had served a hostile section 25 notice on Arqiva, opposing renewal under ground (f) (redevelopment). The landowner also served notice under paragraph 21 of the Code.
During the Case Management Conference, a Deputy District Judge held that notice could not be served under paragraph 21 of the Code. Even though the landowner had also served a section 25 notice opposing renewal the redevelopment ground, the landowner was not "for the time being entitled to require the removal" of the Apparatus because service of the hostile section 25 notice does not automatically grant the landowner the right to possession of the land on the expiry of the notice.
Clearly this means that notice under paragraph 21 of the Code cannot be used in circumstances where a tenancy has the protection of the 1954 Act. Essentially, the 1954 Act issues would need to be resolved before notice under paragraph 21 of the Code can be served.
The decision poses a significant problem for contested lease renewals that also have the protection of the Code. Under the 1954 Act, a landlord may be unable to satisfy the court that it is in a position to carry out a redevelopment under ground (f) unless it is also able to remove the Apparatus from its land, but on the basis of the Crest decision the landowner cannot serve notice requiring removal of the Apparatus before the 1954 Act issues are resolved.
This decision therefore creates a circular problem in which a landowner cannot satisfy the necessary requirements for the return of its land under either scheme. Helpfully, the case was settled whilst an appeal was underway and therefore we are left with a non-binding decision – but guidance nonetheless.
The way forward
The conflict between the Code and the 1954 Act was a key issue that was dealt with in the Law Commission's consultation on the proposed reform of the Code.
It is proposed that the new Code will expressly exclude all Code agreements from the security of tenure provisions of the 1954 Act. Instead Code agreements will have their own security of the tenure provisions under the Code only.
Until the new Code is in place, which is unlikely to be until later this year or even 2017, the conflict between the two statutory regimes remains.
To avoid the issues posed by the clash of the two regimes landowners should ensure that any agreements or tenancies of Apparatus with Ofcom-licensed operators are excluded from the 1954 Act – to ensure that no conflict arises should the landowner wish to regain possession to carry out a redevelopment.
