A recent case has decided that contractual 'lift and shift' provisions overrode statutory provisions contained in the former Telecommunications Code.
Those who avidly follow the pop charts will know that Dua Lipa has got 'new rules'. More excitingly, so too has the telecommunications community in the form of the new Telecommunications Code, which came into effect at the end of last year (the New Code).
Whilst operators and site providers alike are grappling with the subtleties of this New Code, the County Court is continuing to mull over the last few cases generated under the previous Code (the Old Code), including a recent decision on 'lift and shift' provisions that could be of significant relevance to the New Code world.
PG Lewins Limited (the Owner) acquired an office block in Bristol. Telecommunications apparatus belonging to Hutchison 3G UK Limited and EE Limited (the Operators) occupied the rooftop under an agreement made with the Owner's predecessor in title.
The Owner wanted to redevelop the office block and that meant that it temporarily needed vacant possession of the rooftop. So the Owner and the Operators entered into a complex set of agreements with the overall intention that:
- the Operators would temporarily relocate their apparatus from the rooftop onto the Owner's scaffolding; and
- once the redevelopment works were complete, the Owner would give 21 days' notice to the Operators and they would relocate their apparatus on to the new rooftop.
At first everything went to plan; the Operators relocated their apparatus on to the scaffolding and the redevelopment of the rooftop went unhindered. With the roof works completed, the Owner served the agreed contractual notices requiring the Operators to relocate their apparatus from the scaffolding back to the rooftop.
However, the Operators responded by asserting that the contractual notices were an attempt to circumvent a statutory process set out in paragraph 20 of the Old Code and argued that the Owner could not force the relocation without first following the statutory process and obtaining a Court Order.
Old code v contract: the battle for supremacy
Paragraph 20(1) of the Old Code stated,
'Where any.apparatus is kept installed on.any land for the purposes of the operator's network. [the site provider]. may (notwithstanding the terms of any agreement binding that person) by notice given to the operator require the alteration of the apparatus on the ground that the alteration is necessary to enable that person to carry out a proposed improvement [which includes redevelopment] of the land in which he has an interest.'
The Court undertook a detailed review of the provisions of the Old Code and noted paragraphs 2(5) and 27(2), which stated:
'2(5) A. [Code right]. shall not be exercisable except in accordance with the terms (whether as to payment or otherwise) subject to which it is conferred'; and
'27(2) The provisions of this code, except paragraphs 8(5) and 21.shall be without prejudice to any rights or liabilities arising under any agreement to which the operator is a party.'
The Court took the view that the cumulative effect of these two provisions was that the underlying contractual agreement between an operator and the site provider had supremacy over the statutory provisions of the Old Code, subject to two prescribed exceptions that would automatically be void. These were:
- any contractual provision, which sought to curtail an operator's statutory right to apply to Court for the conferral of rights over a piece of land (paragraph 8(5)); and
- any contractual provision, which sought to circumvent the statutory process which had to be followed by a site provider seeking to enforce the removal of apparatus from its land (paragraph 21).
The Court concluded that the contractual relocation mechanism in the underlying agreement neither curtailed the Operators' right to apply to it for the conferral of new rights nor did it relate to the absolute 'removal' of the apparatus from the office block (which it carefully distinguished from 'relocation').
Accordingly, the Court held that the Owner could enforce the contractual relocation provisions and that paragraph 20 of the Old Code merely granted site providers an additional statutory mechanism to require the relocation of apparatus should they choose to use it.
One of the major differences between the Old and New Codes is that the latter does not contain any statutory relocation mechanism. In recent months, a significant amount of commentary and debate has surrounded the issue of whether, in light of the general trend of 'beefing up' operators' rights, the days of site providers being able to enforce 'lift and shift' provisions are now over.
Of course, on the face of it, this is a non-binding County Court decision that relates to a statutory regime, which was repealed at the end of last year and so it should not have any bearing upon that debate. However, paragraphs 12(1) and 100(1) of the New Code, almost exactly mirror paragraphs 2(5) and 27(2), quoted above. And whilst Parts 3 to 6 of the New Code impose, amongst many other things, a strict statutory mechanism which site providers must follow to require absolute removal of apparatus from their land (akin to paragraph 21 of the Old Code), they do not contain any clear and express prohibition upon contractual mechanisms for the relocation of apparatus.
Therefore in light of the fact that the New Code also appears, subject to certain specific exceptions, to preserve the primacy of the underlying contractual agreement, this decision is likely to be very persuasive to the Tribunal as and when it is asked to consider the enforceability of contractual relocation provisions in New Code agreements.
Where site providers have any inkling about future redevelopment plans at the time of negotiating new agreements, they might want to insist on the inclusion of a 'lift and shift' provision.