Cornerstone Telecommunications Infrastructure Ltd v Keast

Electronic Communications Code – Acquisition of rights – Infrastructure – Claimant seeking to acquire rights over defendant’s land under Electronic Communications Code – Defendant unwilling to grant rights – Claimant making reference to Upper Tribunal – Preliminary issues arising – Whether rights sought in reference different from rights claimed under para 20 of Code – Whether claimant seeking Code rights over “electronic communications equipment” which tribunal could not confer – Whether claimant seeking non-Code rights – Whether application of Code to claimant by Ofcom sufficient to enable it to acquire rights – Preliminary issues in favour of claimant The claimant installed and maintained apparatus for electronic communications networks and was owned by the Vodafone and Telefonica network providers to manage and facilitate the sharing of sites and infrastructure. It sought to acquire rights pursuant to schedule 3A to the Communications Act 2003 (“the Electronic Communications Code”) over Penrose Farm, Indian Queens, Cornwall. The defendant was the registered proprietor of the land. The Code governed the acquisition and exercise of rights by electronic communications network providers to install equipment on land and to carry out works. The claimant was a code operator pursuant to an Ofcom direction under section 106(3)(a) of the 2003 Act. There was already a telephone mast and other equipment on the land but the defendant was unwilling to grant the rights sought and asserted that the claimant had not satisfied the test set out in para 21 of the Code for the imposition of Code rights on him. Preliminary issues arose whether: (i) the rights which the claimant sought in the reference were different from the rights it claimed in the notice under para 20 of the Code and, if so, whether it was permissible to do so; (ii) whether the claimant was seeking Code rights over “electronic communications equipment” (ECA) which the tribunal could not confer; (iii) whether the claimant was seeking rights which were not Code rights and which the tribunal could not confer; and (iv) whether the application of the Code to the claimant by Ofcom was sufficient to enable it to acquire the rights sought. Held: The preliminary issued were determined in favour of the claimant. (1) To suggest that the claimant’s statement of case sought rights that were different from those sought in the para 20 notice because they related to a smaller area of land, in the face of the clear terms of para 12 of the statement of case which said that the claimant sought the Code rights set out in the draft agreement appended to the para 20 notice and, in the exact same form, to the claimant’s statement of case, and of the draft agreement itself, was incorrect; to suggest that the respondent could have been misled was fanciful. (2) The Code regulated the legal relationship between code operators and occupiers of land. In enacting para 101 of the Code, Parliament had accepted the Law Commission’s recommendation that the revised Code should provide that property rights in electronic communications apparatus (ECA) installed by a code operator did not change because of being attached to land. The mischief that the provision was designed to prevent was the loss of the code operator’s property by virtue of its becoming part of the land and therefore vested in the landowner. However, the effect of para 101 went further than ownership and had an effect on status. If part of an operator’s ECA on a mast site were to become land, albeit without a change in ownership, then the code operator would not be able to sell that apparatus without making a transfer by deed in accordance with section 52 of the Law of Property Act 1925; and, on sale, title to that ECA would be registrable pursuant to section 4 of the Land Registration act 2002. That would be an absurd result and could not have been Parliament’s intention. Therefore, the effect of para 101 of the Code was that ECA installed pursuant to Code rights, however firmly affixed to land, did not, by virtue of that attachment, become land in accordance with the common law and the principles set out in Elitestone Ltd v Morris [1997] 1 WLR 687; [1997] PLSCS 119. The claimant had applied for Code rights over land, not over ECA. (3) The tribunal’s jurisdiction to impose Code rights and other terms on the occupier of land was set out in para 23 of the Code. The tribunal had a broad discretion to impose such terms as it thought appropriate. All the terms of the draft agreement were in principle within the jurisdiction conferred by para 23, but all were a matter of discretion. They might or might not be granted in due course but none of them was out of bounds. In deciding what it thought appropriate, the tribunal would have very careful regard to the overall scheme of the Code, which provided for the imposition of Code rights and other terms on occupiers of land at a rate of consideration far lower than was payable under the old Code. The draft agreement did not contain any terms that were outside the tribunal’s jurisdiction. (4) The only organisations that could obtain code rights over land (by agreement, or by order of the tribunal) were those that had had the Code applied to them by a direction of Ofcom under section 106 of the Communications Act 2003; that section was amended by the Digital Economy Act 2017 which substituted the word “infrastructure” for the word “conduits”. Before the 2017 amendments, Ofcom’s direction could be made either to enable the operator to provide an electronic communications network, or to enable it to provide a system of conduits which was to be made available to network providers. The Code was applied to the claimant prior to the amendment. However, the Ofcom direction was an instrument made within section 21(1) of the Interpretation Act 1978 and was therefore an enactment within para 3 of part 1 of schedule 3 to the 2017 Act. The term “conduits” in the claimant’s direction was to be read as “infrastructure” pursuant to the 2017 amendment. The direction relating to conduits was to be read as a straightforward and unlimited direction relating to infrastructure under the new Code: Wagstaff v Department of the Environment [1999] 2 EGLR 108 and R v Inspectorate of Pollution, ex parte Greenpeace [1994] 4 All ER 329 applied. Oliver Radley-Gardner (instructed by DAC Beachcroft) appeared for the claimant; Toby Watkin (instructed by Foot Anstey) appeared for the defendant. Eileen O’Grady, barrister Click here to read a transcript of Cornerstone Telecommunications Infrastructure Ltd v Keast