Following a preliminary decision of the First Tier Tribunal (FTT) David Stockill discusses, in the article below, a recent telecoms case, where he represented the site provider (the respondent landlord) against the telecom operators (the claimant tenants) on their application for new code rights.
The site provider established that the operators occupied under a protected Part 2 1954 Act lease, which was continuing, for a while longer at least, at the agreed rent (in excess of £100,000 p.a.) and thereafter at any market rent if a new lease was sought (£10,000 – £20,000) rather than the code rights compensation of somewhere in the region of £3,000 had the arrangement not been a protected business tenancy (all figures subject to valuation in due course).
David was instructed by Waldrons Solicitors and assisted by The Phone Mast Advice Company Ltd.
Overview and the Transitional Provisions
Following a government commissioned Law Commission report, which was published in February 2013, the Digital Economy Act 2017 was enacted. It replaced the old electronics code contained in the Communications Act 2003 by the insertion of “the new code” by replacement of Schedule 3A of the earlier Act. It made significant amendments, of simplification, updating and to make things – for public policy reasons – easier for telecoms operators to provide their services.
The transitional provisions sought to strike the balance between upholding subsisting agreements and the phased bringing in of the new code in accordance with the principle against retrospective effect of new legislation.
If the relationship between the site provider (landowner) and the telecoms operator was one of licence or an excluded 1954 Act lease, then at the end of that relationship the new code applies, and an operator can apply for new code rights. However, when it came to protected 1954 Act tenancies, the position is different. The operator must comply with the 1954 Act provisions, and apply for a new tenancy, which would then not be subject to the transitional provisions, and which, when that new tenancy ends, allows the operator then to seek new code rights.
The usual situation is that existing contractual lease arrangements have a higher rent than future arrangements (often above market rent); but even then the market rent under any new lease determined under the valuation principles of the 1954 Act would be higher than the compensation payable for new code rights. The figures in the case under review are testament to that, as will be seen.
EE Ltd and anr v Clocktower
In EE Ltd and Hutchison 3G UK Ltd v Clocktower Investments Ltd (FTT, 3rd June 2025) the difference was remarkable. The review provisions of the relevant lease had escalated the rent to over £100,000 per annum; and whilst nothing has been determined yet, a market rent might be somewhere between £10,000 and £20,000 per annum, whereas new code rights are likely to give a figure under £5000. Specialist solicitors at Waldron’s solicitors in Walsall were instructed, and they took advice from The Phone Mast Advice Company, and ultimately David Stockill of St Philips Chambers was instructed on the telecoms’ companies application for new code rights.
The consequence of all of this was the reverse of what is normally seen in landlord and tenant cases: the occupiers were arguing that there were not tenants and did not have security of tenure protection under the 1954 Act.
The lease in question was dated 11 June 2004, predating the new code. It was not disputed it was a “subsisting agreement” and the transitional provisions applied, but the status of the agreement was in issue. The lease let an L shaped vacant piece of land on which it was envisaged there would be the construction by the telecoms operator of a radio base station. The radio base station was never built. The demised land was part of a larger, D-shaped parcel of land next to a roundabout and commercial/ retail estate in Grays, Essex. On this land there was a Clocktower (hence the name of the respondent). The lease granted rights:
- to erect and maintain the radio base station;
- to erect apparatus on the Clocktower;
- to enter the Clocktower to alter, maintain or repair the apparatus;
- of access to the radio base station and the apparatus;
- and to install safety equipment on the Clocktower.
The claimants argued that they were not in occupation of, nor indeed capable of being in occupation, of the radio base station since it had not been built, let alone were they in occupation for the purposes of the business. Therefore, section 23 of the 1954 Act did not apply, and they were not business tenants.
They also argued that they were not in ‘occupation’ of the rights set out above.
The legal issues arising
At the hearing the following issues became clarified:
- whether under the 1954 Act the premises, the holding for the purposes of the Act, could extend to and include those parts of the respondent’s retained land on which the apparatus and other equipment had been installed pursuant to rights (2) and (5) set out above[1];
- whether the dominant tenement accommodated by the rights could include the entire undertaking of the claimant telecoms companies;
- whether there was an application of the “ouster” principle, in that the claimants’ occupation by their installations was so extensive as to constitute exclusive occupation, depriving the respondent of any reasonable user of its land, and therefore the claimants’ rights could not be easements capable of being occupied.
The holding
The FTT held, by parity of the reasoning in Pointon York Group plc v Poulton [2007] 1P&CR 6, that incorporeal hereditaments were capable of occupation. In the Pointon case the discontinuous use of a car parking space used in connection with the tenant’s business was held to be premises capable of occupation notwithstanding the tenant having ceased to occupy the offices demised by the lease. Thus, rights-of-way, and of parking, were capable of occupation, and could be protected by the 1954 Act, if there are other premises comprised in the tenancy which are protected.
In the present case, whilst rights (3) and (4) were not capable of being occupied, rights in paragraphs (2) and (5) were incorporeal rights that were capable of occupation and indeed were found as being occupied, following Pointon.
The dominant tenement
The telecoms operators argued that they could not be in occupation of the rights because they were not easements, there being no identifiable dominant tenement occupied or accommodated by the rights (the radio base station had not been built and it remained bare, not demarcated, vacant land).
The claimant tenants’ broader network (its electronic communications code network) was not expressly mentioned in the lease, and the respondent argued that this constituted a further dominant tenement. The lease did not expressly restrict the rights to the L-shaped land as the property accommodated by the apparatus installed pursuant to rights (2) and (5). The respondent argued the dominant tenement also included the telecoms operators’ entire network.
A case concerning a statutory water undertaker was relied upon: re-Salvin’s Indenture [1938] 2 All ER 498. Salvin concerned an express grant of a right to lay mains and water pipes through the grantor’s land. The dominant tenement was held to be not just the land the water authority acquired in order to perform its functions, but also the incorporeal rights acquired to lay mains and pipes in the land of third parties, a wider definition than the deed of grant (the indenture) suggested. The claimant landowner’s argument that there being no dominant tenement, and therefore no right, failed. The defendant’s entire water network was accommodated and constituted the dominant tenement.
More recently, in Bate v Affinity Water Ltd [2019] EWHC 3425, a 1947 deed did not expressly identify the dominant tenement. The case again concerned the deed of grant to a statutory water undertaker’s predecessor in title to lay, maintain and use a water main. The claimant, a recent purchaser, argued that the deed did not create an easement and that the defendant must remove its water main. In a typically thorough judgment, HHJ Paul Matthews, found several ways to uphold the right (as an exercise of a statutory power, as an easement by express grant, or by prescription). He followed Salvin in finding the dominant tenement included the whole undertaking of the water company.
Judge Barlow in the FTT in the present case extended the principles to telecoms operators and their networks and followed the two authorities mentioned above in including the entire telecoms network as the dominant tenement, despite argument that the earlier authorities were wrong, not binding on the tribunal, and inconsistent with Commonwealth authorities.
Ouster
The basic principle is well established and undeniable, that the exclusive unrestricted use of the piece of land passes the property ownership in that land, and there is therefore no easement known to law which gives such exclusive and unrestrictive use of a piece of land (as per Reilly v Booth (1890) 44 Ch D 12, 26).
The judge observed that the servient land included the entire D-shaped piece of land around the Clocktower. She found that the landlord was not excluded from the Clocktower nor that piece of land. Further, the tenant telecoms operators had a right to relocate the apparatus with the respondent’s consent. Ultimately, the respondent had sufficient degree of access to and control of the D-shaped piece of land and the Clocktower to avoid any finding that the rights effectively ousted it from the retained land. The telecoms operators’ arguments in this respect therefore also failed.
Comment
Skirmishes between telecoms operators on the one hand; and landowners on the other, appear ongoing. It is effectively a battle between UK land law and the statutory new code. In the most recent case, for example, On Tower UK Ltd v British Telecommunications plc [2025] EWCA Civil 844, 3rd July 2025, the Court of Appeal found that a break clause in a lease agreement had to be exercised, in accordance with the contractual terms, before the serving of a notice under the new code.
However, as time passes, as old land law/ contractual based arrangements are terminated, and eventually renewed under the new code, these arguments will diminish. Following the Law Commission’s report in 2013 further governmental consultations were carried out, and the government’s response was published by the Department for Culture Media and Sport in May 2016. At paragraph xii of its Executive Summary, there was reference to “a steady move to the new legal framework over the next 10 to 15 years as existing contracts come up for renewal, while simultaneously creating an incentive for new investment” (as set out by Lewison LJ in Cornerstone v Ashlock [2022] 1 P&CR 8 [17], which contains a useful review and outline of the legislation, even though the case went further on appeal). But the arguments appear to have a few years left.
[1] Set out, in the same numerical order, in Schedule 1, Part II of the lease.
Whilst every effort has been taken to ensure that the law in these articles is correct, they are intended to give a general overview of the law for educational purposes. Readers are respectfully reminded that it is not intended to be a substitute for specific legal advice and should not be relied upon for this purpose.
Please also note that these articles represent the opinion of the authors and does not necessarily reflect the view of any other member of chambers.
