A ‘lift and shift’ agreement trumped the Electronic Communications Code

The Electronic Communications Code restricts a landowner’s ability to require licensed providers of electronic communications services to remove apparatus from land. The county court litigation in PG Lewins Limited v Hutchison 3G UK Limited [9 March 2018] concerned an office building in Bristol, which was acquired by a developer for conversion into residential apartments. The telecommunications operator had equipment on the roof, but the agreement that governed the use of the equipment, made under the Telecommunications Act 1984, included a provision giving the landowner the right to require the operator to “lift and shift” its apparatus to a new position, if the landowner wanted to refurbish, alter or improve its property. The developer served a “lift and shift” notice pursuant to the agreement. This led to a further agreement that the operator would re-site its apparatus on the scaffolding around the building while the redevelopment took place, and then move it back to the roof. The initial relocation went without a hitch, but the developer had to apply for an injunction requiring the operator to move the apparatus back to the roof. The operator then completed the work, but claimed that the developer had not followed the statutory processes and that its Code rights precluded liability for the financial losses suffered by the developer as a result of the delay. The Code distinguishes between alterations and removal. It balances the parties’ and the public interest where apparatus is being altered to facilitate redevelopment (paragraph 20), whilst protecting operators against its physical removal (paragraph 21). The county court considered that paragraph 20 would be neutralised if moving apparatus were to constitute “removal”, thereby triggering paragraph 21. The developer did not need to adopt the paragraph 21 process because it was not seeking to have the equipment removed from its land. And it did not need to adopt the paragraph 20 process either, because it had contractual rights upon which it could, and did, rely. The parties had entered into a relocation agreement governing the stages in which the apparatus would be moved. The legislation had not been enacted for the benefit of operators, to create agreements that were enforceable by, but not against, them – and the agreement did not fetter or prevent the proper exercise of the operator’s functions. Furthermore, the policy that underpins the Code gives priority to agreements between parties – stating, for example, that the provisions of the Code are without prejudice to any rights or liabilities arising under any agreement to which an operator is party. It followed that agreements should be enforced, unless the Code states otherwise. Paragraph 27(3) of the Code provides that operators shall not be liable to pay compensation for “any loss or damage caused by the lawful exercise of any right conferred by or in accordance with this Code”. But this case concerned a failure to comply with a contractual obligation, as opposed to the exercise of Code rights. And, where a Code operator has breached obligations to which the exercise of rights is subject, it cannot be said to be lawfully exercising such rights. Practitioners will be aware that a new version of the Electronic Communications Code came into force at the end of last year. But the principles established in this case are expected to be relevant to the new Code. Allyson Colby, Property Law Consultant A version of this article appeared in the 21 July 2018 print edition of EG with the headline “‘Lift and shift’ agreement trumps the Code”