The Bridgewater Canal Co Ltd v GEO Networks Ltd

Communications network operator – Right to carry out works – Consideration – Defendant operator wanting to lay additional cable through duct under canal – Claimant leaseholder seeking payment for right to carry out works – Arbitrator concluding that no right to demand payment – Whether claimant as person controlling land entitled to sum reflecting value of right to retain works on completion – Appeal allowedThe claimant held a long lease of a canal. The defendant communications network operator had a duct under the canal by virtue of a 2001 deed made between the parties’ predecessors in title and for which the defendant paid rent. The defendant wanted to lay an additional fibre optic cable through the duct. It was agreed that the deed did not entitle it to do so but that it could rely on the Electronic Communications Code (the code) contained in Schedule 2 to the Telecommunications Act 1984.The claimant did not oppose the further cable per se but contended that it was entitled to a payment under para 13(2) of the code to reflect the value of the right to keep the additional cable in position once it had been installed. The defendant argued that the code did not require it to make such a payment; it was required to pay for the right to carry out the works but not for the right to keep the cable in place once it had been laid.The dispute was referred to an arbitrator, who decided that he had no power to award terms regulating the future conduct of the right, contained in the code, to execute works carried out pursuant thereto; further, since the claimant was not entitled to object to the fibre optic cable crossing its canal, it was not entitled to demand payment to reflect the value of the right to keep the cable in position. The claimant appealed.Held: The appeal was allowed.Compensation under para 13(2)(e)(i) of the code was payable to the party that objected to the works and consideration under that subparagraph was also payable to that party. Since only the party controlling the land (that is, the party carrying on the undertaking) could object to the works, it was the sole possible recipient of the compensation or consideration.Paragraph 13(2)(e)(ii) was concerned with price. Since loss and damage to the undertaker was dealt with in para 13(2)(e)(i), the natural reading of para 13(2)(e)(ii) was that it concerned the value to the operator of acquiring the right. If part of the notion of carrying out works was the permanent or indefinite consequences arising from them, para 13(2)(e)(ii) envisaged that the consideration would take into account the fact that the right to undertake the work would carry with it the right to retain on or under the land whatever apparatus had been installed by those works.In addition, the consideration had to be fair and reasonable, which precluded a ransom payment. That did not mean that an operator should have something for nothing. If it acquired something of value, fairness required that it should pay for the privilege.Therefore, the operator had to pay for the right to carry out the works, which carried with it the right to keep the works on (or under or over) the relevant land in accordance with whatever terms and conditions were awarded by the arbitrator. The price payable had to be fair and reasonable and take into account everything acquired by the operator in carrying out the works.Jonathan Small QC and Oliver Radley-Gardner (instructed by Wake Smith & Tofields) appeared for the claimant; David Elvin QC and Nicholas Taggart (instructed by LG LLP) appeared for the defendant.Eileen O’Grady, barrister