Tribunal ruling is a step forward in understanding code disputes

The case revolved around the definition of electronic communications apparatus (ECA) and its potential implications under the code.

This case (32 pages / 257 MB) concerned a telephone exchange owned by BT. The exchange was once a hub for the UK’s telephone network but had become partially obsolete due to the evolution of technology. On Tower had agreed with BT to use the roof to locate ECA including a mobile mast.  This agreement included a break right, allowing for early termination if written notice was given.

BT subsequently served a termination notice to end On Tower’s occupation of the roof. This resulted in issues as to whether the building itself could be considered ECA and if On Tower therefore had rights under the code (74 pages / 2.5 MB) to prevent its removal from the roof.

The tribunal considered whether the ECA on the roof was there by way of a code agreement and therefore conferred code rights - rights to install and keep ECA on, under or over land.  The code was brought in to re-set the dial on the speed and ease with which ECA such as phone masts can be rolled out, supporting the government’s vision for the UK’s digital future.  BT argued that there was no Code agreement because the building’s sole purpose was to enclose ECA, and therefore it is not “land” under the code. The tribunal concluded the “sole purpose” of a building must be considered objectively, with the focus on the building’s actual function.

Using this approach, it was found that the exchange’s “sole” purpose was not the enclosure of ECA, because it also contained office, storage and welfare facilities. It meant that the exchange was deemed land by the tribunal, allowing On Tower to claim code rights over its roof.

“Put very simply, the tribunal used practical common sense when looking at the sole purpose of the building,” telecoms disputes expert, Ian Morgan, of Pinsent Masons said.

The tribunal also found that the apparatus on the roof did not interfere with BT’s apparatus in the building, and therefore did not create the “mischief” that the code definition of land was designed to prevent.

The tribunal concluded that the ECA kept on the roof was subject to the provisions of paragraph 30 of the code, which provides a form of security of tenure – meaning any attempt by BT as the building owner to rely on the contractual “break clause” was of no effect. 

“The tribunal’s position fails to account for instances where the operation of a landlord break right is subject to formalities, conditions precedent, or conditions subsequent, which cannot be satisfied via the service of a sole notice under paragraph 31” property disputes expert, Connor Merrifield, of Pinsent Masons, said.

In practice, it may well be that practitioners will continue to serve both a break notice, as well as a code notice, to avoid potential dispute.