Can operators in occupation without Code rights ask for rights to be imposed?

Arqiva Services Ltd v AP Wireless II (UK) Ltd [2020] UKUT 0195 (LC) concerned a 1997 lease that was contracted out of the Landlord and Tenant Act 1954. Arqiva remained in occupation when its lease expired in October 2016, while it negotiated for a new contracted-out lease. But no agreement was reached and the Code came into force in December 2017. Did Arqiva have rights under the new Code? And, if not, how could it acquire them? Transitional provisions in the Electronic Communications Code 2017 state that Part 5 of the Code, which governs renewals by operators with existing Code rights, does not apply to leases with security of tenure that expire after the Code is in force. In such circumstances, Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd [2019] UKUT 338 (LC); [2020] EGLR 2, which is subject to appeal, confirms that operators must seek new tenancies under the Landlord and Tenant Act 1954, which, on termination, can be renewed under the Code. So it was important to establish whether Arqiva became a periodic tenant, protected by the 1954 Act, when its lease expired – or a contractual licensee or tenant at will with no security of tenure at all. The parties agreed that a tenancy at will came into existence while it negotiated for a new lease: Barclays Wealth Trustees (Jersey) Ltd v Erimus Housing Ltd [2014] EWCA Civ 303; [2014] PLSCS 94. But had the negotiations ended? And, if so, had Arqiva become a periodic tenant, with 1954 Act protection, because its rent had been paid and accepted? The tribunal decided that the negotiations had simply paused (while the parties discussed a framework agreement that would apply to all their sites) and that nothing had occurred subsequently to change its status. Consequently, it had remained a tenant at will, with no security of tenure. Was Arqiva’s tenancy at will a “subsisting agreement” for the purposes of paragraph 1(4)(a) of the Code because it was an agreement “in writing” enabling it to keep apparatus on land under the old Code? If so, the current Code would apply (albeit subject to modifications to prevent operators taking full advantage of it retrospectively). The tribunal decided that it did not qualify. The only agreement in writing was the 1997 lease, which had expired; it was the landowner’s conduct – ie its acceptance of rent – that indicated that Arqiva’s continued occupation was acceptable. Part 5 of the Code governs renewals by operators in situ with Code rights. But Arqiva did not have any such rights, even though it had apparatus on the land. So how could it obtain them? Or had it fallen down a “black hole” in the legislation? Arqiva argued that the tribunal must be able to impose an agreement under paragraph 20 of the Code. But the landowner argued that Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2019] EWCA Civ 1755; [2019] PLSCS 201 means that operators in occupation without Code rights cannot obtain them under paragraph 20, which applies to operators new to a site. Judge Elizabeth Cooke noted the serious difficulties that this would cause. Operators in the same position as Arqiva – of whom there are many – would have to vacate their sites and start afresh, or apply for rights to move their apparatus sideways a short distance, wasting time and money while their services were interrupted. The judge was also baffled by the idea that an operator should be barred from obtaining Code rights for a particular site precisely because it is in occupation, has apparatus there, and is providing a service from it – and suspected that a wrong turn had been taken, leading to unacceptable results in terms of the policy behind the Code. But the tribunal was bound by the Court of Appeal’s decision. Consequently, Arqiva would have to take its application for Code rights to appeal.   Allyson Colby, property law consultant