Vodafone Ltd v Potting Shed Bar and Gardens Ltd and another

Telecommunications – Electronic communications code – New agreement – Respondent operator seeking renewed code rights when concurrent lease of reversion to code agreement granted – Upper Tribunal deciding appellant concurrent lessee not entitled to confer new code rights – Appellant appealing – Whether paragraph 10(3) of Part 2 of Code being exhaustive of “party to agreement” – Whether appellant “successor in title” within paragraph 10(2)(a) and (3) – Appeal allowed The respondent was an operator for the purposes of the electronic communications code which enabled operators to acquire rights to install and keep electronic communications apparatus on someone else’s land (code rights). The respondent held a lease of The Old Fire Station in Market Street, Bingley, West Yorkshire, which had originally been granted in 2003 by the then freehold owner. In 2018, a subsequent freeholder granted a concurrent lease to the appellant. The appellant then became entitled to the reversion on the respondent’s lease which expired in 2018. The respondent applied to the Upper Tribunal (UT) to obtain new code rights.  An issue arose as to the procedure to be followed by an operator under Parts 4 and 5 of the Code to obtain a new code agreement where a concurrent lease had been granted by a site provider after it had entered into a code agreement. Part 5 dealt with the termination and modification of agreements and the continuation of code rights after they ceased to be exercisable. The UT decided, amongst other things, that a concurrent lessee was not entitled to confer code rights upon an operator pursuant to a claim for renewal under paragraph 33 of Part 5, since it was not the “other party” to the operator’s code agreement: [2023] UKUT 223; [2022] PLSCS 141. The appellant appealed. The current freeholder was joined to the proceedings but took no part either before the UT or on appeal. Held: The appeal was allowed. (1) The question was whether the appellant was “a site provider who is a party to a code agreement by which a code right is conferred by or otherwise binds the site provider” under paragraph 33(1) of Part 5 of the Code. It was not disputed that the appellant was a “site provider” as defined in paragraph 30(1)(a). The lease was a code agreement which granted the respondent code rights which was binding on the appellant. But the appellant also had to be a “party to the agreement” under paragraph 33(1). Part 2 of the Code was concerned with the conferral of code rights and their exercise. The effect of paragraph 10(3) was that a “successor in title” to the original grantor who was within paragraph 10(2)(a) was to be treated as a party to the agreement, but paragraph 10 did not contain any similar provision for a person within paragraph 10(2)(b) as a person with an interest in land derived from the interest of the original grantor or his successor.   (2) It was impossible to regard the appellant, which fell squarely within paragraph 10(2)(b), as also falling within paragraph 10(2)(a). Paragraph 10(2) on its natural reading referred to three mutually exclusive categories, and there was nothing to suggest that a person could fall into more than one by virtue of the same interest. Moreover, conclusively, paragraph 10(2)(a) referred to the “successors in title to that interest”, a reference to the interest in land that the original occupier of the land had at the time when the code rights were conferred.  In the present case, that interest was the freehold. The appellant was not a successor in title to the freehold because it had not succeeded to the freehold and had never had any title to the freehold interest.  (3) The paradigm case of a person being a party to an agreement was one of the original parties. A code right could only be conferred on an operator by an agreement in writing between the original occupier and the operator signed by or on behalf of the parties to it (para 11(1)(a) and (b)). If the agreement was a code agreement, Part 5 applied. The effect of paragraph 29 was to draw a distinction between business leases whose primary purpose was not to grant code rights, which were left to be governed by Part II of the Landlord and Tenant Act 1954, and all other agreements under Part 2, which took effect as code agreements to which Part 5 applied. The effect was that the agreement would continue despite the expiry of the contractual term but the original parties would each have rights against the other to invoke the provisions of Part 5.   Code agreements were intended to be long-term agreements, continuing despite the expiry of their contractual terms, and capable of surviving both a change of site provider and a change of operator.  One would expect that the provisions of the Code would also be capable of continuing to apply despite a change in the identity of the site provider or operator. (4) Under paragraph 10(2)(a), someone who stepped into the original site provider’s shoes by taking an assignment of its interest would be bound by the agreement conferring code rights. Paragraph 10(3) simply spelled out what would be implicit anyway.  The question whether paragraph 10(3) was exhaustive was unclear as a matter of language. In the context of the Code, the correct approach was to work out how the regime was intended to work and then consider what meaning should be given to the word “occupier” to achieve that goal: Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2022] UKSC 18; [2022] PLSCS 99; [2022] 1 WLR 3360 considered. Applying that approach, the regime was intended to work so that the persons currently entitled to the benefit and burden of the agreement as operator, and as site provider, were parties to the agreement and could exercise the rights conferred by Part 5. That could be achieved by construing paragraph 10(3) as not intended to define exhaustively who was to be treated as a party to the agreement. On that basis the appellant, being currently entitled to both the benefit and the burden of the lease by virtue of the concurrent lease, was to be regarded as a “party to the agreement” which could invoke paragraph 31 by serving notice on the respondent, and both it and the respondent could invoke paragraph 33 by serving notice on each other as “the other party to the agreement”. Wayne Clark and Fern Schofield (instructed by Eversheds Sutherland (International) LLP) appeared for the appellant; Graham Read KC and James Tipler (instructed by Osborne Clarke LLP) appeared for the respondent.  Eileen O’Grady, barrister Click here to read a transcript of Vodafone Ltd v Potting Shed Bar and Gardens Ltd and another