Key Facts
- •AP Wireless II (UK) Limited (APW) appealed a First-tier Tribunal (FTT) decision that two agreements with On Tower UK Limited (OT) were licences, not leases.
- •The agreements concerned the installation and operation of telecommunications equipment on two sites.
- •The agreements were made before the current Electronic Communications Code and are considered subsisting agreements under the Digital Economy Act 2017.
- •The lease/licence distinction is crucial because leases under the 1954 Act cannot be terminated under the Code; only renewed.
- •The FTT Judge found neither agreement granted exclusive possession, a key element of a lease.
Legal Principles
Whether an agreement creates a lease or licence depends on whether it grants exclusive possession of land for a term at a rent; the parties' label is not determinative.
Street v Mountford [1985] AC 809
The principles in Street v Mountford apply to business premises.
Clear Channel UK v Manchester City Council [2005] EWCA 1304
Ordinary contractual construction principles apply to leases and licences; consider the parties' intentions as a reasonable person would understand them, considering the surrounding circumstances.
Mexfield Housing Co-operative Ltd v Berrisford [2011] UKSC 52; Rainy Sky SA v Kookmin Bank [2011] UKSC 50
The Electronic Communications Code (and the old Code) doesn't exist in a legal vacuum; the ordinary law of landlord and tenant applies where relevant.
Vodafone Ltd v Potting Shed Bar and Gardens Ltd [2023] EWCA Civ 825
Subsequent conduct of parties generally cannot be used to construe an agreement, but surrounding circumstances at the time of the agreement can be considered.
Sattar v Sattar [2009] EWHC 289 (Ch)
Exclusive possession requires factual possession (sufficient physical control) and intention to possess (to exercise control for one's own benefit).
JA Pye (Oxford) Ltd v Graham [2002] UKHL 30
A term certain is required for a lease; this includes fixed-term tenancies and periodic tenancies (but not tenancies with restrictions on the right to terminate).
Mexfield Housing Co-operative Ltd v Berrisford [2011] UKSC 52
Outcomes
Appeal allowed in part.
The 2002 Agreement granted exclusive possession and was a lease; the 1997 Agreement did not have a term certain and was a licence.