On Tower UK Limited v J.H. Green Limited

This appeal from the Upper Tribunal (Lands Chamber) concerns the terms of an agreement which is to be imposed on the parties pursuant to the electronic communications code contained in schedule 3A to the Communications Act 2003 (“the Code”). More specifically, it relates to the extent of the upgrading and sharing rights which the respondent, On Tower UK Limited (“On Tower”), should enjoy under that agreement.

The appellant, J.H. & F.W. Green Limited (“J.H. & F.W. Green”), is the freehold owner of Dale Park Estate, Madehurst, West Sussex (“the Estate”). The Estate includes 39 residential properties as well as more than 2,000 acres of agricultural land, farm buildings and woodland.

In 1999, J.H. & F.W. Green granted EE Limited (then known as “One 2 One Personal Communications Limited”) a 20-year lease of a small woodland site in the Estate with a view to its being used to accommodate a telecommunications mast. The site is reached via a 0.8 mile road or track from the public highway and is within the South Downs National Park.

The lease gave the tenant the right “to install the Equipment upon or within the Premises and thereafter to inspect maintain and adjust repair alter renew and use the same for the Permitted Purpose”. “Equipment” was defined to mean “the Antennae and associated ground equipment as shall from time to time be installed in or upon the Premises or the Owner’s Property pursuant to this Lease” and “Antennae” to refer to “three cross polar antennae and two dish antennae together with any pole mount or other structural steel work supporting such antennae”. The tenant was entitled to place such additional antennae on the site as might be required in the exercise of the rights granted by the lease, but only with the landlord’s consent, which however was not to be unreasonably withheld. The tenant could also, without having to obtain the landlord’s consent, install or alter equipment “within the Equipment Accommodation”, the “Equipment Accommodation” being “the equipment container or containers to be erected upon the Premises pursuant to this Lease”. The lease further enabled the tenant to grant a third party rights to share the occupation of the site for the purposes of telecommunications activities, but on the basis that the landlord was to be paid 30% of sums received from the third party, with a minimum of £1,000 per annum.

The lease has been held by On Tower since 2000. The site nowadays houses a 22.5 metre tower, two panel antennae, three dish antennae and two equipment cabins.

On Tower is a wholesale infrastructure provider (or “WIP”) and an “operator” within the meaning of paragraph 2 of the Code. It is not itself a mobile network operator, but it provides infrastructure such as masts and cabinets for the use of mobile network operators and other communication providers. As the Tribunal said in paragraph 5 of its decision, “the network operators’ equipment, such as fibre and antennae, brings [On Tower’s equipment] to life and creates electronic communications networks”. Unlike some other infrastructure providers, On Tower is not owned by any network operator and makes its apparatus available to network operators generally on a neutral basis.

According to its terms, the lease was due to expire on 16 March 2019. However, it was then continued by paragraph 30 of the Code.

By a notice dated 1 May 2019, On Tower claimed a new lease of the site. Towards the end of that year, the parties not having reached agreement, On Tower applied to the Upper Tribunal pursuant to paragraph 33(5) of the Code for an order under paragraph 34. On Tower asked for an order pursuant to paragraph 34(6) terminating the 1999 lease and requiring the parties to enter into a new agreement conferring “code rights”, as defined in the Code, on it.

While J.H. & F.W. Green would have preferred On Tower to leave the Estate or at least to move its mast to an alternative location within the Estate, it accepted that On Tower was entitled to a new agreement in respect of the existing site. By the time of the hearing before the Tribunal, the parties had agreed that On Tower would be granted a 10-year agreement and on many of its terms. The matters on which they differed concerned equipment, upgrading and sharing.

The Tribunal (Judge Elizabeth Cooke and Mrs Diane Martin MRICS and FAAV) summarised what was at issue as follows:

As the Tribunal noted in paragraph 32 of its decision, the issues were interrelated:

The Tribunal decided the disputed points in favour of On Tower, concluding that the agreement to be imposed on the parties should include the upgrading and sharing rights which On Tower had sought. The Tribunal further determined that On Tower should pay J.H. & F.W. Green £1,200 per annum by way of consideration under the new agreement. After noting in paragraph 138 of its decision that a “particular concern of [J.H. & F.W. Green] is the shadow of the future upgrade activity, involving the installation of new ECA which cannot currently be specified, and which may (or may not) be bigger, more powerful, noisier, more unsightly, and involve a taller mast”, the Tribunal said in paragraph 139:

J.H. & F.W. Green now challenges the Tribunal’s decision as regards upgrading and sharing rights.

Schedule 3A to the Communications Act 2003 (“the 2003 Act”), comprising the Code, was inserted into the 2003 Act by the Digital Economy Act 2017, replacing the code set out in schedule 2 to the Telecommunications Act 1984 (as amended latterly by the 2003 Act).

The Code deals with the relationship between, on the one hand, “operators” and, on the other, “occupiers” of land which operators wish to use. A person can be designated as an “operator” either for “the purposes of the provision by him of an electronic communications network” or for “the purposes of the provision by him of a system of infrastructure which he is making available, or proposing to make available, for use by providers of electronic communications networks for the purposes of the provision by them of their networks”: see section 106 of the 2003 Act and paragraph 2 of the Code. In other words, the Code can be applied not only to a network provider but to an entity such as On Tower which supplies infrastructure in support of networks without itself providing one.

Among other things, the Code makes provision for “code rights” to be conferred on operators. By paragraph 3 of the Code, a “code right”:

As its heading (“Power of Court to impose agreement”) indicates, Part 4 of the Code, comprising paragraphs 19-27, is concerned with circumstances in which an agreement conferring code rights can be imposed by the Tribunal (the jurisdiction of the Court under the Code being exercised by the Tribunal). Paragraph 20 allows an operator requiring a code right to apply for an order conferring it in the absence of agreement. By paragraph 21, the Tribunal may make such an order if the two conditions specified in sub-paragraphs (2) and (3) are met. Sub-paragraphs (2) and (3) state:

Paragraph 23(1) of the Code states that “[a]n order under paragraph 20 may impose an agreement which gives effect to the code rights sought by the operator with such modifications as the court thinks fit”. By paragraph 23(2), an order under paragraph 20 “must require the agreement to contain such terms as the court thinks appropriate, subject to sub-paragraphs (3) to (8)”. Sub-paragraph (5) stipulates that any agreement imposed by the Tribunal must include the terms the Tribunal thinks appropriate:

Paragraph 24 of the Code provides for the amount of consideration payable by an operator under an agreement imposed under paragraph 20 to be “an amount or amounts representing the market value of the relevant person’s agreement to confer or be bound by the code right (as the case may be)”. By paragraph 24(3), however, the market value is to be assessed on, among others, the assumptions that “the right that the transaction relates to does not relate to the provision or use of an electronic communications network” and that “paragraphs 16 and 17 (assignment, and upgrading and sharing) do not apply to the right or any apparatus to which it could apply”. In this connection, the explanatory notes to the Digital Economy Act 2017 explained that the Act involved “moving to a ‘no scheme’ valuation regime that ensures property owners will be fairly compensated for use of their land, but restricts their ability to profit from the public need for communications infrastructure” (paragraph 14) and that “[t]he value of the rights contained in paragraphs 16 and 17, which relate to the assignment of an agreement or to upgrading and sharing apparatus, is specifically excluded from the assessment of market value, to ensure that no ‘premium’ is added for rights conferred by statute, not by agreement” (paragraph 420). The Department for Culture Media & Sport’s May 2016 publication, “A New Electronic Communications Code”, had said at page 15 that site providers “should get fair value for the use of their land” but that this “should not, as a matter of principle, include a share of the economic value created by the very high public demand for services that the operator provides” and that a “no scheme” rate “is more relevant to the nature of modern digital communications infrastructure rollout, and will work to encourage greater investment and improved network coverage”.

In this respect, the Code differs from what the Law Commission had recommended in its 2013 report, “The Electronic Communications Code” (Law Com No 336). As the Law Commission explained in paragraph 5.76 of its report, its consultation had “not produced evidence that could justify our recommending a ‘no-scheme’ pricing basis in the public interest”. With regard to rights to share or upgrade equipment, the Law Commission said in paragraph 3.42, “Such rights must be negotiated for, or granted by the tribunal; it may be right for there to be additional consideration payable, depending upon the market itself.”

As its heading says, Part 5 of the Code, comprising paragraphs 28-35, addresses “Termination and modification of agreements”. By paragraph 30, an operator continues to be entitled to exercise a code right conferred by an agreement even after the agreement would have terminated according to its terms. A site provider may, however, seek to bring such an agreement to an end by serving a notice under paragraph 31 on, among others, the ground that “the operator is not entitled to the code agreement because the test under paragraph 21 for the imposition of the agreement on the site provider is not met”. It is also possible for either an operator or a site provider to apply for an agreement to be modified or replaced pursuant to paragraph 33. Where a notice is given under that paragraph and the parties have not reached agreement on the proposals in the notice six months later, the operator or site provider may apply to the Tribunal for an order to be made under paragraph 34: see paragraph 33(5).

Paragraph 34 of the Code provides as follows:

Part 3 of the Code, headed “Assignment of code rights, and upgrading and sharing of apparatus” and comprising paragraphs 15-18, is also important in the context of this appeal. It applies to all agreements conferring code rights and, as explained in paragraph 15, makes provision for operators to assign such agreements, to upgrade electronic communications apparatus to which such an agreement relates and to share the use of any such electronic communications apparatus. The explanatory notes to the Digital Economy Act 2017 explained that the Government “intends infrastructure sharing to assist future deployment of technology such as 5G”.

Paragraph 17 is in these terms:

Finally, it is to be noted that, where a code agreement is imposed, paragraph 25 of the Code entitles the site provider to compensation “for any loss or damage that has been sustained or will be sustained by that person as a result of the exercise of the code right to which the order relates”. Such compensation falls to be assessed in accordance with paragraph 84.

The Tribunal distinguished between, on the one hand, rights to install and keep electronic communications apparatus on site and to upgrade (which, the Tribunal noted, are code rights within paragraph 3 of the Code) and, on the other hand, sharing. With regard to the former, the Tribunal said in paragraph 49 that its understanding of the Code was that “the Tribunal may (not ‘must’, so there is a discretion) confer a Code right on the claimant provided that the conditions set out in paragraph 21 are met”. With regard to those conditions, the Tribunal was “unimpressed” by the suggestion that a new mast could be “hundreds of metres tall, and that safety regulations could require it to be festooned with lights and covered in dayglo paint to prevent aircraft from flying into it”, commenting in paragraph 51 that that sort of scenario is “as practically impossible as it is implausible”. The Tribunal took seriously concerns which had been expressed about traffic, noise, security and the visual intrusion of a taller mast, observing, “There are bound to be such worries; the advance of technology creates a practical need for [On Tower] and an alarmingly unknown future for [J.H. & F.W. Green]”. However, the Tribunal thought that alarm “exaggerated” (paragraph 52) and that J.H. & F.W. Green’s witnesses had paid “little regard to the provisions of the agreement”, the terms of which “forbid [On Tower] to cause a nuisance to [J.H. & F.W. Green] or to cause it loss or injury” (paragraph 53).

The Tribunal went on:

Turning to sharing, the Tribunal said this:

The Tribunal accordingly concluded that On Tower should have unrestricted rights to install, upgrade and share.

The issues raised by the appeal can be considered under the following headings:

General approach

The significance of paragraph 34(12) of the Code

The significance of paragraph 17 of the Code

What was before the Tribunal was an application for the 1999 lease, as continued under paragraph 30 of the Code, to be terminated and replaced by a new agreement pursuant to paragraph 34(6). Paragraph 34(9) provides for the terms of a new agreement under paragraph 34(6) to be such as are agreed between the operator and the site provider and, by paragraph 34(10), the Tribunal “must … make an order specifying those terms” if the parties cannot agree. In such a case, paragraph 34(11) states that “[p]aragraphs 23(2) to (8), 24, 25 and 84 apply … as they apply to an order under paragraph 20”. Further, paragraph 34(12) stipulates that the Tribunal “must also have regard to the terms of the existing code agreement” and paragraph 34(13) directs the Tribunal, in determining which order to make under paragraph 34, to “have regard to all the circumstances of the case” and in particular to:

It is to be noted that, in the context of an application for the replacement of a code agreement under Part 5 of the Code, the Tribunal is not directed to have regard to the conditions set out in paragraph 21, nor to paragraph 23(1). On the other hand, the Tribunal is told to have regard to paragraph 23(5), quoted in paragraph 18 above.

There is, however, no mention of paragraph 34 of the Code in the section of Tribunal’s decision dealing with whether On Tower should be granted the upgrading and sharing rights it was asking for. In contrast, the Tribunal explained in paragraph 49 of its decision that it was its understanding that the Tribunal could confer a code right on On Tower provided that the conditions set out in paragraph 21 of the Code were met, and it proceeded to consider these conditions in paragraphs 51-56 of the decision. The Tribunal also cited paragraph 23(1) of the Code, saying in paragraph 50 of the decision that the Tribunal “may, by the agreement which it imposes, give effect to the code right sought by the operator with such modifications as it thinks appropriate (paragraph 23(1))”.

In the circumstances, Mr Christopher Pymont QC, who appeared for J.H. & F.W. Green with Mr Wayne Clark, submitted that the Tribunal had applied the wrong part of the Code. It had approached On Tower’s application as if it had been made under Part 4 when it had in fact been made under Part 5 and so had applied paragraph 21 instead of paragraph 34. As a result, the Tribunal had adopted the wrong starting position, assuming that, at least as regards the right to upgrade (being a code right), the right On Tower asked for should be granted “subject to such modifications as the court thinks appropriate” (by reference to paragraph 23(1)) and that modifications would be appropriate only where necessary to cause the least possible damage to J.H. & F.W. Green (in the light of paragraph 23(5)). The Tribunal’s reasoning, so it was said, was “infected” by its erroneous application of paragraph 21, and, overlooking the importance of paragraph 34, the Tribunal left out of account the matters mentioned in paragraphs 34(12) and (13).

I shall consider later in this judgment whether the Tribunal failed to recognise the significance of paragraph 34(12), and also paragraph 17, of the Code. Those issues apart, however, the fact that the Tribunal appears to have mistakenly treated On Tower’s application as one under Part 4 of the Code does not seem to me to matter. In fact, as was argued by Mr Oliver Radley-Gardner QC, who appeared for On Tower with Mr Justin Kitson, the Tribunal’s error was to the disadvantage of his client, not J.H. & F.W. Green. It meant that the Tribunal thought that the conditions set out in paragraph 21 had to be met for it to accede to On Tower’s application when that was not in truth the case.

Mr Pymont suggested that the Tribunal had considered what terms should be included from the point of view of what “the operator wants” and that it had approached matters on the footing that, if the conditions in paragraph 21 of the Code were satisfied, On Tower should be granted what it sought subject only to “such modifications as the court thinks fit”. I do not think there is any substance in such criticisms, however. Whether an application is made under Part 4 or under Part 5, the Tribunal is bound to address itself to what the operator is seeking. That does not mean that it will assume that the operator should be given what it asks for and, in the present case, the Tribunal expressly recorded in paragraph 49 of its decision that it was its understanding that it “may (not ‘must’, so there is a discretion)” confer a code right if the paragraph 21 conditions were met. The Tribunal also noted, in paragraph 48, that it was common ground that “the fact that a claimant wants a right does not mean that it automatically has to have it” and that “the Tribunal has a judicial discretion as to the terms of the agreement and must engage in a balancing exercise between the needs of the parties”. It is true that the Tribunal incorrectly quoted paragraph 23(1) (“An order under paragraph 20 may impose an agreement which gives effect to the code right sought by the operator with such modifications as the court thinks appropriate”) when paragraphs 34(6) and (10) were in fact in point, but the latter provisions were to similar effect. Paragraph 34(6) empowers the Court to order the parties to enter into a new agreement and paragraph 34(10) states that, if the parties are unable to agree the terms, “the court must … make an order specifying those terms”.

Mr Pymont pointed out that paragraph 23(5) of the Code was the only “constraint” to which the Tribunal referred in paragraph 60 of its decision, where the Tribunal observed that it had a discretion whether or not to impose a term giving sharing rights beyond those for which paragraph 17 provides “subject to the constraint of paragraph 23(5)”. However, paragraph 23(5) could fairly be described as a “constraint” and paragraph 34(11) states that it is to apply in relation to an order under paragraph 34(10). With regard to the other provisions which paragraph 34(11) identifies as applicable to an order under paragraph 34(10), paragraph 23(2) merely provides for the agreement “to contain such terms as the court thinks appropriate, subject to sub-paragraphs (3) to (8)”, and there is no suggestion that paragraphs 23(2A)-(4) and (6)-(8), 24, 25 and 84 were of importance in relation to the grant of upgrading and sharing rights in this case.

Nor can it be said that the Tribunal overlooked matters identified in paragraph 34(13) of the Code. The sub-paragraphs of potential relevance were (13)(a) and (b) (“the operator’s business and technical needs” and “the use that the site provider is making of the land to which the existing code agreement relates”) and the decision covers both.

The upshot, I think, is that the real questions raised by this appeal concern paragraphs 17 and 34(12) of the Code. It may be unfortunate that the Tribunal approached On Tower’s application as if it were made under Part 4, but the error does not of itself provide a basis for overturning its decision.

Paragraph 34(12) of the Code reads:

Mr Pymont argued that this wording is similar to, and modelled on, that to be found in section 35 of the Landlord and Tenant Act 1954 and that it must be construed in a similar way.

The Landlord and Tenant Act 1954 allows a tenant of business premises to apply to the Court for a new tenancy. By section 35(1) of the Act:

Section 35 of the 1954 Act was the subject of consideration by the House of Lords in O’May v City of London Real Property Co Ltd [1983] 2 AC 726 (“O’May”). In that case, it was the landlord’s wish, for respectable reasons, that the new lease which a tenant was to be granted under the Act should differ from its predecessor in relation to repairing obligations and service charges. The House of Lords declined to sanction the change. Having observed at 740 that “in deciding the terms of the new tenancy, as to which its discretion is otherwise not expressly fettered, the court must start by ‘having regard to’ the terms of the current tenancy, which ex hypothesi must either have been originally the subject of agreement between the parties, or themselves the result of a previous determination by the court in earlier proceedings for renewal”, Lord Hailsham went on at 740-741:

As Mr Pymont pointed out, the Law Commission can be seen to have had in mind the Landlord and Tenant Act 1954, and section 35 in particular, when preparing its report. The Commission stated in paragraph 6.114 of the report:

Lewison LJ touched on the significance of what has become paragraph 34(12) of the Code in Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd [2021] EWCA Civ 90, [2021] L&TR 14 (“Ashloch”). As Lewison LJ explained in paragraph 1 of his judgment, the question in that case was whether the Tribunal has jurisdiction to impose code rights over land in favour of an operator which is already in occupation of that same land under a tenancy granted before the Code came into force and which is continuing under section 24 of the Landlord and Tenant Act 1954. The Court of Appeal’s answer was in the negative. In the course of his judgment, Lewison LJ said this:

Mr Pymont stressed the reference to paragraph 34(12) of the Code and section 35 of the Landlord and Tenant Act 1954 alike making the terms of the existing tenancy/agreement the starting point. However, in EE Ltd v Stephenson [2021] UKUT 167 (LC), [2021] 4 WLR 116, Fancourt J, sitting as the President of the Upper Tribunal (Lands Chamber), was cautious about comparisons between paragraph 34(12) of the Code and section 35 of the 1954 Act. After noting in paragraph 52 of the judgment that “[t]here can be no doubt that the structure and provisions of the Code are similar in various ways to Part 2 of the 1954 Act”, Fancourt J said this:

Mr Pymont took issue with Fancourt J’s reference in paragraph 55 to a “presumption against change”, arguing that the applicable principle with section 35 of the 1954 Act is rather that any departure from the existing terms has to be justified by the party seeking it. In practice, however, a variation in terms to the prejudice of the tenant may be hard to justify, the general purpose of the 1954 Act being to protect the business interests of tenants. Be that as it may, though, I agree with Fancourt J that, despite the similarity in language between paragraph 34(12) of the Code and section 35 of the 1954 Act, things said about the latter will not necessarily apply to the former. As Fancourt J said, the 1954 Act and the Code have very different purposes. When considering whether the terms of a new business tenancy should differ from those of its predecessor, the “comparatively weak negotiating position of a sitting tenant” and the purpose of protecting the business interests of the tenant may, as Lord Hailsham indicated in O’May, be of significant weight. The Code cannot be said to be aiming to protect site providers in a similar way. To the contrary, as Fancourt J pointed out, the Code seeks to enable operators to “use and exploit sites more flexibly, quickly and cheaply than had previously been the case”.

That is by no means to say that the terms of an existing code agreement can be ignored. To the contrary, paragraph 34(12) of the Code specifically directs the Court to have regard to the terms of the existing code agreement, albeit that the Tribunal is also required to have regard to a variety of other factors. As Fancourt J said in paragraph 57, paragraph 34(12) “cannot be read as imposing an overarching restriction on change”, but in an appropriate case the terms of the existing agreement may still be significant. In particular, where a party wishes the new agreement to contain a term found in the existing agreement, that will be a factor to considered and there will be an onus on the party contending for a change to justify it.

The weight to be attached to the fact that a term was included in the existing code agreement will in part turn on its consistency with the aims of the Code. If the relevant term cannot be thought to be in conflict with those aims, the case for replicating it in the new agreement may be compelling. Plainly, the position will be different if the term is at variance with the objectives of the Code. In practice, the terms of a code agreement entered into since the introduction of the Code are more likely to accord with its purposes than those of an agreement which pre-dates the Code.

For completeness, I should record that I do not consider the views expressed in the previous paragraphs to be inconsistent with the ratio of Ashloch.

Mr Pymont argued that, in the present case, the Tribunal wrongly failed to pay any regard to the terms of the 1999 lease and that, had it done so, it should have concluded that those terms were more in keeping with those proposed by J.H. & F.W. Green than those for which On Tower contended. It was incumbent on On Tower to justify wider rights, Mr Pymont said, and it had not done so.

However, J.H. & F.W. Green does not appear to have suggested in its submissions to the Tribunal that the provisions of the 1999 lease as to upgrading and sharing were of relevance, and understandably so. As they stood, those terms were consistent with neither the purposes of the Code nor its terms. Paragraph 17 of the Code gave On Tower automatic upgrading and sharing rights at odds with the 1999 lease and the Code also required the consideration payable to a site provider to be assessed on a “no scheme” basis. In the circumstances, J.H. & F.W. Green argued for On Tower to have narrower rights than had been conferred by the 1999 lease, while On Tower sought more extensive ones. It was common ground that a wholly new form of agreement was appropriate.

In the circumstances, there was no need for the Tribunal to refer to paragraph 34(12) in this case. The parties did not suggest that it was of significance, and it was not.

Paragraph 17 of the Code provides for an operator to be entitled to upgrade or share if any changes to the electronic communications apparatus have “no adverse impact, or no more than a minimal adverse impact, on its appearance” and the upgrading or sharing “imposes no additional burden” on the site provider.

As already mentioned, the Tribunal saw paragraph 17 of the Code as “operat[ing] as a floor”, providing “the minimum rights that an operator is to have”. It said in paragraph 25 of its decision that “the imposition of the paragraph 17 conditions is a useful starting point”, but considered that “there is no reason to suppose that anything else needs special justification or will be hard to establish”.

Mr Pymont took issue with the Tribunal’s approach. He argued that paragraph 17 of the Code does not merely represent a floor, but sets a benchmark or standard. Parliament has in enacting paragraph 17 struck what it regards as a fair balance between the interests of operators and those of site providers. That is not to say that it is not possible for an operator to apply for and be given more extensive rights, but sufficient justification for doing so must be provided. In that connection, Mr Pymont spoke of “pretty striking circumstances” and “pretty compelling evidence”, while saying that he did not wish to hang his hat on either formulation. What matters, he suggested, is that it is recognised that an operator seeking rights going beyond those supplied by paragraph 17 is asking for a departure from the base point determined by Parliament and, as a result, there must be evidence warranting a move away from what Parliament presumed to be appropriate.

For his part, Mr Radley-Gardner accepted that the onus is on an operator wishing to have upgrading and sharing rights beyond those for which paragraph 17 of the Code provides to show why they should be conferred. He submitted, however, that the onus is not a heavy one. The operator will need to explain why it requires more, but paragraph 17 is just a starting point.

The significance of paragraph 17 of the Code was considered by the Lands Tribunal for Scotland (Lord Minginish and A. Oswald FRICS) in Cornerstone Telecommunications Infrastructure Ltd v Fothringham (11 August 2020). There was an issue in that case as to whether sharing rights should be confined to those envisaged in paragraph 17 or should be unrestricted. In the course of its decision, the Lands Tribunal said:

The Upper Tribunal (Martin Rodger QC, Deputy Chamber President, and Diane Martin MRICS FAAV) took a somewhat different view in Cornerstone Telecommunications Infrastructure Ltd v London and Quadrant Housing Trust [2020] UKUT 282 (LC), [2021] L&TR 1 (“London and Quadrant”). While the Tribunal said in paragraph 78 that “[t]he onus is on the party wishing to depart from para. 17 to justify its request”, it considered that reference to the Law Commission’s 2013 report supported “the view that para.17 is intended to reflect the lowest common denominator for sharing and upgrading, a floor rather than a ceiling” (paragraph 69) and concluded that paragraph 17 “represents the irreducible minimum, in terms of upgrading and sharing rights, which an operator is entitled to under a Code agreement” (paragraph 77). The Tribunal continued in paragraph 77:

In the passages from the report to which the Tribunal referred in London and Quadrant, the Law Commission addressed the question whether the Code should make special provision to permit sharing and upgrading irrespective of the terms of the agreement with the site provider (see paragraphs 3.32 and 3.33 of the report). The Commission concluded in paragraph 3.39 that “in the majority of cases both the sharing and the upgrading of electronic communications apparatus have serious technical implications” and that this meant that, subject to a specific exception, “they cannot be permitted as a matter of course by way of an ancillary right for Code Operators”. With regard to the proposed exception, the Commission said in paragraph 3.48:

These passages lend support to Mr Radley-Gardner’s submissions. The Law Commission considered that, exceptionally, an operator could automatically be given rights to share and upgrade where there could be no adverse impact on the site provider, but that the operator would otherwise need to negotiate for or apply for such rights. Nothing in the Commission’s report indicates any intention that operators should normally be limited to the rights now given by paragraph 17 of the Code; it merely shows that the Commission thought that the grant of additional rights should be the subject of specific agreement or decision rather than being automatic. Nor does any different picture emerge from either the Department for Culture Media and Sport’s “A New Electronic Communications Code” or the explanatory notes to the Digital Economy Act 2017. “A New Electronic Communications Code” stated that the Government agreed with the Law Commission that “there are some circumstances where it is appropriate for Code operators to upgrade and share apparatus in a way that is unlimited by contractual agreements”; it nowhere said that there was to be any particular limitation on operators seeking wider rights. Further, the ministerial foreword explained that the Government wanted “to put in place modern regulation which fully supports the rollout of digital communications infrastructure” and that the Code was designed to “pave the way for future technological evolution in the coming decades” and would “provide a robust platform to enable long-term investment and development of digital communications infrastructure in the 21^st Century”. Likewise, the explanatory notes said, among other things, that the 2017 Act “aims to enable access to fast digital communication services for citizens and businesses, to enable investment in digital communications infrastructure, to shape the emerging digital world for the benefit of children, consumers and businesses, and to support the digital transformation of government, enabling the delivery of better public services, world leading research and better statistics” and that the Government “intends infrastructure sharing to assist future deployment of technology such as 5G”. Such objectives would be harder to achieve if, for example, operators’ sharing rights were usually to be limited to those granted by paragraph 17.

In short, I have not been persuaded that the Tribunal’s assessment of the significance of paragraph 17 of the Code was other than correct. While paragraph 17 provides a starting point and it is incumbent on an operator seeking more extensive rights to explain why, it need not establish “pretty striking circumstances” or “pretty compelling circumstances”. Nor is it the case that an application for wider rights is to be approached on the basis that it is inherently improbable that such rights are appropriate. Each application must be assessed on its particular merits.

Mr Pymont argued that, in the present case, there was no sufficient evidence to justify a departure from the upgrading and sharing rights for which paragraph 17 of the Code provides. There was, he said, no specific evidence as to what upgrading On Tower wished to carry out, nor within what timescale. Moreover, the fact that paragraph 17 was assumed not to suffice for On Tower’s purposes implied that its upgrading and sharing could have a more than minimally adverse effect on the appearance of the equipment and/or could impose an additional burden on J.H. & F.W. Green. On Tower was thus contending for an unrestricted right to upgrade in unknown ways, and to share, regardless of the consequences to J.H. & F.W. Green, which could potentially be highly damaging. True it may be that the planning regime would impose some limitations on what On Tower might do, but On Tower’s desire for flexibility could not make it right to override the protection which a paragraph 17 regime would give J.H. & F.W. Green. Further, it was fanciful to suggest that “without the ability to share the claimant is out of business and cannot fulfil its statutory purpose”. There was no evidence demonstrating that the imposition of a term such as J.H. & F.W. Green contended for would be the difference between On Tower staying in or going out of business, having regard to the fact that On Tower has thousands of sites across the country.

For his part, Mr Radley-Gardner did not suggest that On Tower had precisely specified the upgrading that it would wish to carry out during the lifetime of the new agreement. The position is rather, he explained, that On Tower needs flexibility to accommodate an uncertain future. The terms of the new 10-year agreement, he argued, have to be such as to allow On Tower to meet (a) unpredictable requirements of network operators, (b) the mid-term roll-out of 5G and (c) the prospect of further technological change. In this connection, Sarah Burrows, an estate surveyor with On Tower, explained in a witness statement that the site at issue is expected to be the subject of upgrading to 5G in approximately 3-5 years’ time and that she expected that the existing infrastructure and apparatus would have to be upgraded to facilitate 5G technology and/or another sharer. She also said this:

Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2019] EWCA Civ 1755, [2020] 1 P&CR 15 is noteworthy here. The decision of the Court of Appeal in that case, which at present is under appeal to the Supreme Court, suggests that an operator which is in occupation of land cannot serve a notice under paragraph 20 of the Code in respect of it. That would appear to mean that On Tower could not revert to the Tribunal for additional rights during the currency of the new agreement. Of course, a site provider could confer further rights by agreement, but (to quote paragraph 30 of the Tribunal’s decision) “no doubt at a price of its own unhindered by the Code’s policy on consideration”. In paragraph 55 of its decision, the Tribunal observed that “the requirement to negotiate, outside the protection of the Code (because of the effect of Compton Beauchamp … ), for permission for every new antenna (etc) would be an expensive and time-consuming burden for [On Tower] to sustain”.

In all the circumstances, it seems to me that the Tribunal was amply justified in concluding that the new agreement between On Tower and J.H. & F.W. Green should include the terms as to installation, upgrading and sharing sought by On Tower. The Tribunal took account of J.H. & F.W. Green’s concerns, but considered the alarm “exaggerated” and that there would be “ample protections in the agreement, combined with the control exercised by the local planning authority and the extra protection afforded in the National Park”; the agreement and planning law, the Tribunal said, “provide the protection that [J.H. & F.W. Green] needs from the levels of nuisance and disturbance that can realistically be anticipated”. Further, the Tribunal was fully entitled to take the view that On Tower had sufficient reason for wanting the terms it proposed. There was evidence supporting the Tribunal’s assessment that a limit on equipment or upgrading would cause On Tower “extensive” difficulties and that “the advance of technology creates a practical need” for On Tower, and, as the Tribunal noted, “[On Tower’s] evidence of the public benefit of what it seeks is unchallenged”. While, moreover, inability to share this particular site might not be fatal to On Tower, the Tribunal was obviously correct to see ability to share as key to On Tower’s business as a neutral host. Uncertainty as to the future is, here, not a bar to On Tower being given the rights it asks for but, to the contrary, affords a compelling basis to accede to its application. There was very good reason to give On Tower upgrading and sharing rights beyond those for which paragraph 17 of the Code provides.

I would dismiss the appeal.

I agree.

I also agree.