On 1 September 2020, the Upper Tribunal (Lands Chamber) (“UT”) handed down judgment in Cornerstone Telecommunications Infrastructure Ltd v University of the Arts London.
This is another decision in a number of cases that Cornerstone Telecommunications Infrastructure Ltd (“Cornerstone”) has brought before the UT and courts relating to the 2017 Electronic Communications Code (“Code”).
The operator, Cornerstone, was seeking permanent rights under Paragraph 20 of the Code to install and operate apparatus on the roof of a building owned by the site provider, University of the Arts London (“UAL”) after having been granted interim rights over the site in earlier litigation.
UAL and a developer had entered into a complex development agreement including a sale and lease-back. The lease-back contained a rolling break clause in favour of UAL, conditional on delivering up the site with vacant possession, free from any third-party rights and free of telecommunications apparatus. There was a strong incentive for UAL to exercise the break clause promptly, as after 18 months the rent would increase from nil to £3 million per annum.
Paragraph 20 enables the UT to impose an agreement conferring Code rights to an operator and an occupier of land if both of the conditions set out in Paragraph 21 are met: that the prejudice caused to the relevant person by the order is capable of being compensated by money; and that the public benefit likely to result from the making of the order outweighs the prejudice to the relevant person.
UAL submitted that neither condition in Paragraph 21 had been met. It argued that the UT imposing an agreement would result in their failure to meet their obligations under the development agreement, and that the security of tenure granted to agreements imposed under Paragraph 20 would prohibit UAL from being able to give vacant possession of the premises and therefore be unable to exercise their break clause, subsequently risking lengthy litigation to remove the operator. These factors, including reputational risk, risk to its relationship with its students and the potential for injunctive relief being sought against it, UAL contended, could not be quantified in money. It was UAL’s submission that the public benefit couldn’t possibly outweigh this extreme degree of prejudice.
Cornerstone referenced the current pandemic to substantiate their position that the development may not go ahead as intended and the prejudice to UAL was therefore open to doubt. Although not denying that litigation may be required, Cornerstone referred to UAL’s submission that litigation would not progress quickly enough to remove the operator in good time as being exaggerated.
The UT declined to impose a Paragraph 20 agreement, finding that the conditions in Paragraph 21 had not been met. The prejudice caused to UAL by imposing an agreement could not be adequately compensated in money, nor would the public benefit likely to have arisen from the agreement have outweighed that prejudice.
The UT acknowledged the public need for availability of electronic communications, particularly at the present time of the pandemic, but noted that Parliament could not have intended a site owner to comply with this public duty at all costs or it would not have provided for relief where the site owner would suffer prejudice that was not capable of being adequately compensated.
This case has provided useful consideration of the meaning of being adequately compensated by money, as well as the interplay between public benefit and prejudice to the relevant party in the context of a redevelopment where both parties are public service providers.