Elite Embroidery Ltd v Virgin Media Ltd

Telecommunications – Electronic Communications Code – Compensation – Claimant seeking compensation for loss under new Electronic Communications Code 2017 – Respondent applying to strike out claim – Whether loss caused by failure to comply with old Code agreement might be subject of claim for compensation under new Code – Whether notice of reference to be struck out – Application granted In 2016 the claimant, which had acquired land at Front Street, in Newcastle-upon-Tyne for the purpose of erecting a new factory and offices, discovered a fibre optic cable buried below the surface of the land. It transpired on enquiry that the cable belonged to Telewest, a telecommunications company which had been purchase by the respondent. Further investigations revealed that the cable had probably been laid by Telewest sometime in the mid-1990s under an agreement entered into between the local authority and Telewest for the installation of a cable under the local authority’s land. Unfortunately, the cable was not installed in the location provided for by the agreement. The claimant made all the usual inquiries about the presence of utilities and conducting media, but the presence of a telecommunications cable under the land was not revealed. When the claimant discovered the cable it did not remove it, but instead redesigned the works which it was undertaking to enable the cable to remain in its original location. The modifications involved the diversion of some drainage runs which resulted in additional expense to the claimant. It was said that the programme of works was delayed and that as a result the claimant was not able to claim certain government grants. The claim itself was in six figures, with the cost of modifications to the works being in the order of £60,000 and the lost government grant an additional £186,000. The claimant made a reference under the new Electronic Communications Code 2017 seeking compensation for its losses from the respondent(the first such reference to be filed with the Tribunal). The Code set out the basis on which electronic communication operators might exercise rights to deploy and maintain electronic communications apparatus on, over and under land. It replaced the previous electronic communications code which was found in Schedule 3 to the Communications Act 2003. The respondent applied to strike out the claim on the basis that the loss caused by failure to comply with an old Code agreement could not be the subject of a claim for compensation under new Code. Held: The application was granted. (1) It was apparent that all of the events giving rise to the claim occurred before the new Code was enacted. When the cable was laid in the 1990s the old Code conferred the relevant rights. When the land was sold to the claimant and in 2016 when the claimant incurred the expense of modifying its works and sustained the loss of the government grant the old Code remained in existence. The agreement between Telewest and the local authority was therefore likely to have been an agreement to which the old Code applied and (in the absence of some relevant transitional provision) it could not have been an agreement under the new Code. It was not alleged that the respondent or Telewest had exercised any rights under the new Code. Therefore, the operative provisions concerning compensation found in Part 14 of the Code had no application. Paragraph 84(1) applied only where the tribunal was asked to make an order imposing an agreement, or an order requiring the removal of equipment. No such order was sought in the present case, so it followed that no compensation could be payable under para 84. Paragraph 85 conferred an entitlement to compensation for injurious affection only when a right was conferred by or in accordance with any of the provisions of Parts 2 to 9 of the Code. It was common ground in this case that no such rights had been conferred on anyone. The old Code had provisions for compensation for injurious affection which were contained in para 16. The transitional provisions having effect in relation to the cessation of the old Code and the introduction of the new Code were found in Schedule 2 to the Digital Economy Act 2017 and provided, by para 14, that: “The repeal of the existing code does not affect paragraph 16 of that code, or any other right to compensation, as it applies in relation to the exercise of a right before the new code comes into force”. It followed that (so far as compensation was concerned) rather than rights under the old Code being replaced by rights under the new Code, the repeal of the old Code was without prejudice to any accrued right to compensation under it. The tribunal had not been given jurisdiction to entertain such a claim. In those circumstances, the tribunal had no jurisdiction in the present reference. The claim itself appeared to be a viable claim for damages for trespass or nuisance or for compensation under the old Code, but if so, it had to be pursued elsewhere. Therefore, the reference had to be struck out under para 8(2) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010. John Campbell QC (instructed by Stokes Law & Mediation, of Newcastle) appeared for the claimant; Christopher Rafferty (instructed by Virgin Media Ltd) appeared for the respondent. Eileen O’Grady, barrister Click here to read transcript: Elite Embroidery Ltd v Virgin Media Ltd