The Telecoms Code and the 1954 Act

The Upper Tribunal has given an important decision on the interface between the Landlord and Tenant Act 1954 and the Electronic Communications Code. Last year, I commented on the first-instance decision in On Tower Ltd v Gravesham Borough Council (unreported, 2 October 2023) – a somewhat surprising decision. The First-tier Tribunal found in favour of an operator by allowing it to seek new rights under the Electronic Communications Code, even where it had been occupying under a tenancy enjoying the protection of the Landlord and Tenant Act 1954. The operator was looking to use the Code as it had lost its rights under the 1954 Act by failing to take the necessary procedural steps to apply to the court for a new tenancy. Last month, the Upper Tribunal (Lands Chamber) overturned the decision of the FTT ([2024] UKUT 151 (LC); [2024] PLSCS 106) in an important decision on the interface between the 1954 Act and the Code. The decision relies on the rationale of the Supreme Court in Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2022] UKSC 18; [2022] EGLR 28, in which it was decided that it would be inconsistent with the way the Code was intended to work for an operator that has a lease which predates the Code to be given a choice whether to seek a new agreement under Part 4 of the Code or to renew its lease under the 1954 Act. The facts In 1997, the council granted a lease of the mast site on the roof of a building called the Hive in Northfleet, Kent, to a predecessor of On Tower for a term of 20 years. The term expired on 31 March 2017, but the tenancy of the site was continued by Part 2 of the 1954 Act. On Tower was the assignee of the benefit of the tenancy from September 2019 onwards. The site provider needed to repair the roof of the block, and while negotiations were attempted, nothing came of these, so in December 2021 the council served a section 25 notice, opposing the grant of a new lease. On Tower issued its claim for a new tenancy at court in time, but did not serve the proceedings on the council within the four-month window provided for by CPR 7.5(1). Although On Tower made an application to extend time, the county court dismissed this, together with the claim itself. On Tower did not appeal and instead, shortly before the hearing of its application, served notices under paragraph 20 (for permanent rights) and paragraph 27 (for temporary rights where they had equipment on the site) on the council under the Code. The notices were followed up by the proceedings in the FTT, which refused the council’s claim to strike out the application. The Upper Tribunal’s determination The appeal was put on three grounds, raising the following questions: (1) Having failed under the 1954 Act, was the operator entitled to try again using Part 4 of the Code? (2) Was the application an abuse of process in the circumstances? (3) Were the paragraph 20 and paragraph 27 notices invalid as being served during the life of the 1954 Act (pursuant to which the operator enjoyed code rights)? Deciding the first ground of appeal, the deputy president, Martin Rodger, commented: “The reasoning of this tribunal and the Court of Appeal in Ashloch [Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd and another [2021] EWCA Civ 90; [2021] EGLR 14], which Lady Rose found ‘persuasive’, focused on what I had suggested would be the ‘astonishing’ consequences if, contrary to the recommendations of the Law Commission, operators could choose to renew under the Code instead of under the 1954 Act. The Code is much more favourable to operators than the 1954 Act; it allows a much shorter notice period, a considerably more generous basis of assessment of rent, and a less restricted approach to other terms. Whether under Part 4 or Part 5, it also provides more limited grounds of opposition for the site provider. “In my judgment, the suggested operation of the Code proposed by On Tower would result in a truly absurd state of affairs in which an operator obliged first to seek renewal under the less favourable regime of the 1954 Act would know that, if they failed, they would then gain access to the more desirable reward of a renewal under Part 4 of the Code. It would become pointless for a site provider to resist renewal under the 1954 Act on any ground other than redevelopment…” Reasoning The deputy president went on to rely on the very different positions of an operator that had agreed to contract out its rights under the 1954 Act and one that has failed to exercise its rights under the same, noting that each regime confers one route of renewal on the operator. He also relied on the fact that the Code took care to exclude 1954 Act tenancies from the Code on its enactment via the transitional provisions. With regard to ground 2, he indicated that he would not have considered the application an abuse of process (if he had been required to determine the point), owing to the decision in Aktas v Adepta [2011] QB 894, which established that a failure to serve a claim form in time is not an abuse of process and is not to be regarded as a reason for a second claim raising the same cause of action to be struck out. In relation to the third ground, that the notices were invalid, the deputy president held that they were, because the third condition for a notice, contained in paragraph 27(1)(c), which requires that all existing code rights have come to an end, was not satisfied. This was as a result of the fact that On Tower’s lease was still continued under Part 2 because it was not “determined” for the purposes of section 64(2) of the 1954 Act on the date four months after the claim form was issued (the last day for service applying CPR 7.5(1)). Rather, it was not determined until the date the court determined On Tower’s application to extend time. Laura West is a director (barrister) at Fieldfisher Photo © Umang Patel/Pexels