The question that arose last year, in EE Ltd v Trustees of the Meyrick 1968 Trust [2019] UKUT 164 (LC); [2019] PLSCS 131, was whether trustees were entitled to the protection of paragraph 21(5) of the Electronic Communications Code (intention to redevelop) and could defeat an operator’s request for Code rights by constructing a mast of their own. The tribunal decided that they had devised the scheme to sidestep the Code and ruled against them, applying the Supreme Court decision in S Franses Ltd v Cavendish Hotel (London) Ltd [2018] UKSC 62. But that was not the end of the litigation.
In EE Ltd v Trustees of the Meyrick 1968 Trust [2020] UKUT 0105 (LC), the parties disagreed about the terms of the rights that were to be granted. So they had to go back to the tribunal, where the trustees lost again. The tribunal deprecated the trustees’ failure to respond to amendments to the draft agreement made by the operator and ruled in its favour. The tribunal has since received submissions from both parties on costs and has now appended an addendum to its judgment, which is worth noting.
The operator argued that it was successful in both hearings and that it should be awarded its full costs on an indemnity basis. But, to obtain an award of costs on an indemnity basis, there must be something in the losing party’s conduct or in the general circumstances of the case that take it out of the norm.
The operator argued that the trustees’ evidence was opaque and that they had been wholly unreasonable. They had discarded many of their arguments, such as their claim for consideration and compensation of £6,500 pa and £4.6m respectively and had ended up with a single “site payment” of £575 pa. They had disregarded the tribunal’s directions as to the procedure to be followed in relation to the travelling draft agreement and had raised issues at the last minute, which the tribunal had described as “vexatious conduct”. And their behaviour had caused the operator to incur substantial costs. So it asked the tribunal to signal its displeasure by an award of indemnity costs in its favour.
The trustees argued that the tribunal had accepted that they had had a reasonable prospect of being able to implement their development scheme, but found against them on the question of whether they had had an unconditional intention to implement their scheme. But that was not unusual, they said, and should not sound in indemnity costs. And, although they had acted wrongly, or had been misguided, in the way that they responded to the terms suggested to them, it would be wrong to deny them the ability to question the reasonableness and proportionality of the operator’s costs.
But the tribunal ruled in favour of the operator. The trustees’ proposed redevelopment was uneconomic and the prospects of them wasting their resources on it were wholly implausible. The redevelopment plans were a smoke screen, conceived in order to defeat the claim for Code rights. And, to make matters worse, the trustees had misrepresented the results of a questionnaire that was said to demonstrate the need for better broadband on their estate and had sought to delay the case and to hijack the final determination by raising new issues at the last moment. This was unreasonable, and out of the norm. So they were liable for costs on an indemnity basis.
Allyson Colby, property law consultant
