Gravesham Borough Council v On Tower UK Limited
[2024] UKUT 151 (LC)
EE Limited v AP Wireless II (UK) Limited
29 July 2024
[2024] UKUT 216 (LC)
Upper Tribunal
A landlord wanted to add a clause to a cell tower lease that lets them get the land back early to build something new. The court decided the landlord can have that clause, but they also set a fair price for renting the land, which was higher than previous rulings suggested.
Key Facts
- •Renewal of a greenfield telecommunications site lease under Part 5 of the Electronic Communications Code.
- •Dispute over rent and landlord's right to terminate the lease for redevelopment.
- •Site located in a rural green belt area.
- •Existing lease assigned to claimants (EE/H3G) in 2015, respondent (APW) acquired an overriding lease in 2018.
- •New lease agreed for ten years with a break clause after five years.
- •Respondent is a subsidiary of an international investor in mobile mast site leases, not a Code operator.
- •Respondent's intention to potentially redevelop the site with a new mast, potentially outside the Code.
- •Claimants' concerns about redevelopment impacting service and their Code rights.
- •Expert valuation evidence presented by both parties, significantly differing in rent amount.
- •Tribunal's task to determine appropriate rent under paragraph 24 of the Code, using the 'no-network' assumption.
Legal Principles
Paragraph 24 of the Electronic Communications Code dictates rent assessment under the 'no-network' assumption, excluding the value of the telecommunications network itself.
Electronic Communications Code, paragraph 24
The Tribunal must determine lease terms to cause the least possible loss and damage to those with interests in the site (paragraph 23(5)).
Electronic Communications Code, paragraph 23(5)
A landlord's intention to redevelop, even for a telecommunications use, may justify a break clause, balancing operator security and site provider's redevelopment rights.
EE Ltd and Hutchinson 3G UK Ltd v Stephenson and another [2022] UKUT 180 (LC)
The Code does not prevent redevelopment, even for a telecommunications use, provided the intention is genuine.
EE Ltd and Hutchinson 3G UK Ltd v Stephenson and another [2022] UKUT 180 (LC)
In valuing under paragraph 24, the Tribunal should consider evidence of comparable non-telecommunications lettings of small sites, adjusted to remove the value to the tenant from their intended use.
This case's analysis of evidence
Outcomes
Landlord's break clause allowed, exercisable after five years with 18 months' notice, if redevelopment is intended and cannot reasonably be undertaken while the lease continues. The break clause excludes redevelopment for telecommunications use.
Balances the operator's need for security with the site provider's redevelopment rights, considering the site's operational history and the lack of evidence of immediate redevelopment.
Annual rent set at £1,750.
Tribunal revisits its previous lower figure of £750 in light of new evidence of non-telecommunications lettings of small rural sites and inflation. The final figure considers the unique burden on the landlord, while discounting value specific to the telecommunications use.
An obscure indemnity clause omitted from the lease.
Clause poorly drafted and unclear, and a broad indemnity already covers the likely intended ground.