The Bridgewater Canal Co Ltd v Geo Networks Ltd

Communications network operator – Right to carry out works – Consideration –Appellant operator wanting to lay additional cable through duct under canal – Respondent leaseholder seeking payment for right to carry out works – Whether any right to demand payment – Whether respondent as party controlling land entitled to sum reflecting value of right to retain works on completion The respondent held a long lease of a canal. The appellant communications network operator, which maintained a duct under the canal, for which it paid rent, wanted to lay an additional fibre-optic cable through the duct. Since it had no private law right to do so, it relied on the Electronic Communications Code (the code) contained in Schedule 2 to the Telecommunications Act 1984. Paragraph 13(2)(e) of the code provided that an arbitrator could make an award to a party that objected to the works representing: “(i) compensation… in respect of loss or damage sustained by that person in consequence of the carrying out of the works; and (ii) consideration… for the right to carry out the works”.The respondent did not object to the additional cable 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 cable in position once it had been installed. The appellant argued that the code required it to make a payment only in respect of the right to carry out the works, not the right to keep the cable in place once 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 because para 23(2) related solely to the carrying out of the works and not to the grant of any rights. That decision was reversed by the High Court, which held, in favour of the respondent, that the payment for the right to carry out the works had to take into account everything that the operator had acquired by undertaking them, including the right to keep the works on, over or under the relevant land in accordance with whatever terms and conditions the arbitrator might award: see [2010] EWHC 548 (Ch); [2010] 13 EG 82 (CS). The appellant appealed.Held: The appeal was allowed.The respondent’s claim was governed by one of the special regimes laid out in the code, namely that in paras 12, 13 and 14 concerning “linear obstacles”, which was concerned with enabling an operator to cross railways, canals or tramways and associated land. The special regimes differed from the general regime of the code: whereas the general code required that all parties affected by the need to install and keep electronic communications apparatus should be adequately compensated for the grant of the necessary rights, including the payment of consideration for the right to keep the equipment on the land, the special regimes did not all provide for the payment of compensation or consideration.Although the linear obstacles regime did so provide, it did not require the payment of consideration for the right to retain the apparatus once installed. Under para 12, the crossing under the railway, canal or tramway could not exceed that route by more than 400m; the interference with or intrusion on the land of others would therefore be minimal. Further, an undertaker that held land used for, or incidental to, a railway, canal or tramway, although not necessarily a public body, was likely to be providing a public facility. There was no principle that required the provider of one public facility to be paid by another, namely a provider of electronic communications networks or services, for such a minimal intrusion. Moreover, the compensation or consideration under para 13(2)(e) was payable to the party in control of the land, that is the party carrying on the railway, canal or tram undertaking, and not, as in the general regime, to the occupier. Given those features, paras 12 and 13 did not require the code to be interpreted so as not to burden a party’s property without some compensatory payment. The compensation and consideration payable under para 13(2)(e) was payable only in respect of the works necessary to implement the right to install and keep electronic communications apparatus, not for the conferring of that right. Accordingly, there was no need to interpolate into the words “the right to carry out the works” in para 13(2)(e) the additional words “and to keep the same”.Nicholas Dowding QC and Nicholas Taggart (instructed by LG) appeared for the appellant; Jonathan Small QC and Oliver Radley-Gardner (instructed by Wake Smith & Tofields) appeared for the respondent.Sally Dobson, barrister