Prejudice to land owner outweighs public benefit

Cornerstone v University of the Arts London [2020] UKUT 248 (LC)

Following the grant of interim code rights, which the land owner challenged unsuccessfully in the Court of Appeal last year, this case concerned the operator’s application for code rights, under paragraph 20, to install and operate apparatus on the rooftop of the London College of Communications (LCC).

The land owner opposed the imposition of code rights, as it had agreed to sell the LCC to a developer with vacant possession (subject to a lease-back) prior to its demolition. The land owner argued that the imposition of the code agreement would prevent it from complying with its obligations to the developer. Accordingly, the land owner would suffer prejudice which could not be compensated by money and that prejudice would not be outweighed by the public benefit of imposing the code rights.

Public benefit

Contrary to the land owner’s arguments, the Tribunal found that it could only consider the public benefit of the rights being imposed as against no rights being imposed and could not assume that interim rights could be granted or the apparatus could be installed elsewhere. Furthermore the Tribunal found that it should not weigh up the “net public benefit” of the imposition of code rights, in that the code rights might have a negative effect on the redevelopment, which it was argued would also be in the public benefit.

The Tribunal found that public benefit will generally outweigh a land owner’s inconvenience, annoyance and readily calculable losses, but that in the present case there was more at stake. The case crossed the boundary between prejudice that has to be suffered by a land owner for the public good and prejudice that is too much to ask and accordingly declined to impose code rights.

Although the decision in this case went in the land owner’s favour, the Tribunal made it clear that the land owner will generally face an uphill battle to show the prejudice it suffers outweighs the public benefit.

Despite declining to impose code rights, the Tribunal went on to provide its views on a number of terms of the code rights sought which were a matter of general concern in telecom disputes:

Compensation  – the land owner sought a term that compensation would be paid to compensate for any loss and damage as it arose. The operator instead proposed an upfront payment of £9,600. The Tribunal favoured the operator’s approach in order to save the time and bureaucracy of making constant calculations.

Definition of Equipment – the land owner sought a schedule of equipment which was to be initially installed on the site. The operator wanted a more general provision allowing any electronic communications apparatus. The tribunal found for the operator, noting the potential for dispute about whether a future installation comprised an upgrade or an addition. The Tribunal did note that the need to specify equipment might be greater on open land.

Access – the Tribunal denied the operator’s request for a term allowing it to access any part of the land owner’s property as might be reasonably required, finding that this would expose the land owner to unnecessary risk of disruption. The Tribunal also refused the land owner’s request to retain an unqualified right to specify a particular access route for the operator.

Right to Upgrade and Share – the operator sought to acquire the right to upgrade the equipment and share the sites without complying with the Paragraph 17 conditions (that sharing and upgrading would not impose any additional burden on the occupier and upgrading would have no more than a minimal adverse impact on appearance). The Tribunal found (as in Fothringham, also considered in this bulletin) that the burden was on the operator to show that the safeguards were not required. The Tribunal found that the conditions need not be included here, as the building was shortly due to be demolished and so appearance was not important and the land owner’s concerns over the structural integrity of the building were addressed by other clauses.

Assignment – the land owner sought to prevent assignment, underletting and other dispositions to parties other than code operators and make assignment to code operators subject to a guarantee agreement. The operator claimed that it was inappropriate to include a standard lease term in a code agreement and that all code operators were subject to the same regulation so guarantees were unnecessary. The Tribunal found that regardless of whether the agreement was a lease or not, it was inappropriate to include restrictions on alienation to parties other than code operators. However, it found that the inclusion of a requirement to provide a guarantee was reasonable, as is not to be assumed that all operators are able to meet the relevant obligations merely because they are regulated by Ofcom.

Indemnity – in deciding the extent of the indemnity offered by the operator, the Tribunal agreed with the operator that the purpose of the indemnity was not to act as a catch-all protective provision for the benefit of the land owner, but was limited to regulating and managing third party claims against the land owner, arising from the operator’s unlawful acts or omissions.