Telecoms: Upper Tribunal gives guidance to site providers on prejudice

In a decision which will be welcomed by site providers, the Upper Tribunal (Lands Chamber) has decided that a site provider could not be compensated in money for prejudice caused by the installation of telecoms apparatus and refused to impose an agreement under section 20 of the Telecoms Code (Cornerstone Telecommunications Infrastructure Ltd v University of The Arts London [2020] UKUT 248 (LC)).

The building in question is in Elephant and Castle, South East London and is owned by University of the Arts (UAL).The telecoms operator, Cornerstone, applied under paragraph 20 of the Telecoms Code seeking the imposition of a 5-year agreement to install and operate apparatus on the roof of UAL’s building.

At the hearing, the Upper Tribunal had to consider (1) whether a paragraph 20 agreement should be imposed and (2) the terms of that agreement. We deal with the first of these issues.

Cornerstone previously installed telecoms apparatus on the rooftops of two other buildings in Elephant and Castle Shopping Centre. However, these buildings were due to be demolished due to the impending redevelopment of the area. Cornerstone was therefore seeking a replacement site and sought rights to install and operate its apparatus on the rooftop of the UAL building. The UAL building is, however, also due to be demolished and redeveloped as part of the same redevelopment programme. UAL had already entered into various agreements with the developer, which included an agreement for the developer to build UAL a new building and in return UAL to give vacant possession of the existing building in around 5 years’ time.

At an interim hearing earlier this year, the Upper Tribunal granted Cornerstone interim Code rights under paragraph 26 of the code, to allow the installation of apparatus on the roof the UAL building, while the parties waited for the final hearing.

Paragraph 21 of the Code provides the Upper Tribunal may make an order imposing an agreement under paragraph 20 of the Code if the following conditions are met (1) the prejudice caused to the relevant person is capable of being adequately compensated by money and (2) the public benefit likely to the result from the making of the order outweighs the prejudice to the relevant person.

At the full hearing, UAL confirmed that it would have accepted a 5 year interim Code agreement (which would not require Part 5 termination proceedings) however it argued that if a full paragraph 20 agreement were imposed, UAL would be prejudiced on the following grounds:

• UAL would lose control of its contractual obligations to the developer of the UAL building;
• Due to the security of tenure that a full Code agreement attracts, UAL would not be able to give vacant possession if Cornerstone’s apparatus was still on the roof of the building and UAL could not be certain when and how Cornerstone would remove its apparatus; and
• There was a risk that UAL would need to bring proceedings under Part 5 of the Telecoms Code in order to remove Cornerstone’s apparatus.

UAL argued that compensation for the risk of proceedings for an injunction to remove Cornerstone’s apparatus could not be quantified in money. Any court proceedings would be public and posed an unquantifiable risk to UAL’s reputation, its relationship with its students and its staff.

The Upper Tribunal accepted the evidence that the redevelopment was likely to go ahead and the main factor was the risk of litigation with the developer and/or Cornerstone, the resulting stress and uncertainty to UAL and its employees and potential reputational damage. The Tribunal regarded these as prejudices which could not be compensated in money. The Tribunal also considered that the public benefit did not outweigh the prejudice to UAL. On this basis Cornerstone’s application for the imposition of a full Code agreement under paragraph 20 failed.

Takeaway points

• The decision gives helpful guidance on the Upper Tribunal’s approach when considering the “public benefit” test in paragraph 21 of the Code. The decision will be welcomed by site providers as it is generally considered very difficult for a site provider to show that the conditions are not met unless it is redeveloping a site itself.
• The Upper Tribunal also confirmed that its jurisdiction to impose interim agreements under paragraph 26 of the Code is not time-limited and considered that it would have jurisdiction to impose a 5 year interim agreement under paragraph 26 if Cornerstone had sought this (it is unclear whether a further application will be made).
• The Upper Tribunal also gave a further clear reminder to parties on conduct and costs during dealings under the New Code, it noted that “the level of hostility that we have observed between the parties to this reference has been unseemly and unnecessary, and has inflated costs on both sides”.