April last year witnessed a very rare event in the world of the Electronic Communications Code (Code): a court decision on the interpretation of a part of the Code. Thekla Fellas, our head of real estate litigation, acted on behalf of Chris Nicholson (Operations) Limited seeking the removal of Arqiva’s telecommunications apparatus from its residential development site at the former Cambridge City Football Club. The matter came to court on 28 April 2015 before Deputy District Judge Dack at Cambridge County Court. The court struck out part of the claim relating to the removal of telecoms apparatus on the basis that a paragraph 21 notice cannot be served before the end of the contractual term of the relevant lease and, moreover, cannot be served even where a landlord has already served a section 25 notice under Part II of the Landlord and Tenant Act 1954 (1954 Act) opposing renewal of the operator’s lease (in that case, on the basis of redevelopment pursuant to section 30(1)(f) of the 1954 Act). Wayne Clark of Falcon Chambers, who was instructed by Fladgate to appear on behalf of Crest, analyses whether the decision of the Deputy District Judge was correct.
Paragraph 21 of the Code
This provides, in so far as is material:
“Restriction on right to require the removal of apparatus
(1) Where any person is for the time being entitled to require the removal of any of the operator’s electronic communications apparatus from any land (whether under any enactment or because that apparatus is kept on, under or over that land otherwise than in pursuance of a right binding that person or for any other reason) that person shall not be entitled to enforce the removal of the apparatus except, subject to sub-paragraph (12) below, in accordance with the following provisions of this paragraph.
(2) The person entitled to require the removal of any of the operator’s electronic communications apparatus shall give a notice to the operator requiring the removal of the apparatus.
(12) A person shall not, under this paragraph, be entitled to enforce the removal of any apparatus on the ground only that he is entitled to give a notice under paragraph 11, 14, 17 or 20 above; and this paragraph is without prejudice to paragraph 23 below and to the power to enforce an order of the court under the said paragraph 11, 14, 17 or 20.”
In summary, it is considered that:
As to the two points:
Can a paragraph 21 notice be served before the expiry of a contractual term (whether that be of a lease or licence)?
There is no doubt that a paragraph 21 notice can be served in numerous circumstances prior to the expiry of any contractual term of a lease or licence. It is to be noted that paragraph 21 in fact entitles a notice to be served pursuant to its terms in three circumstances:
It is apparent from a consideration of the wording of paragraph 21(1) that none of the categories is in fact limited to serving a notice only upon expiry of a lease or licence:
Thus it is clear that a person may serve a paragraph 21 notice before expiry of the operator’s lease or licence.
“Entitled to require the removal”: is there a need for there to be an immediate entitlement to require removal?
This is the more difficult part of the argument. It may be said that all of the Categories identified above, when properly considered, are ultimately based upon an immediate right to seek removal at the time the notice is served. In relation to Category 1, the right of removal arises by reason of the enactment; under Category 2 the right of retention on the land has expired; and under Category 3 the breach of the covenant or the nuisance, by way of example, confers upon the server the entitlement, immediately, to seek removal (subject, of course, to establishing the same).
The real difficulty here is with respect to Category 2. Can a notice be served under paragraph 21 prior to the expiry of the contractual term where the only basis upon which one can otherwise seek removal is only after the term has expired which has yet to occur?
There is nothing within paragraph 21 that indicates that the entitlement to require removal must be one which can be enforced immediately by the person serving the notice although it would be suggested that it is necessarily implicit in the words “is for the time being entitled”; one cannot be entitled until the right to possession has accrued and that is only upon expiry of the term.
The Deputy District Judge in the Crest Nicholson decision concluded that there was a need to show an immediate entitlement to require removal at the time of the service of the paragraph 21 notice and this was reflected in the words “Where any person is for the time being entitled….” within paragraph 21(1). However, it may be said that the phrase “for the time being” simply describes or identifies the person who has the entitlement; it is not performing any function with respect to determining the time at which removal may, but for paragraph 21, be enforced. The phrase “for the time being” thus limits the class of person that can invoke paragraph 21. The identity of the person may change e.g.:
The argument is that the verb “to require” means, in this context, to have the right to demand removal not as an absolute right as at the date of service but demanding removal by reference to some legal right which is sought to be invoked. All that paragraph 21 is seeking to do is enable the person who asserts an entitlement to seek removal, to initiate the procedure for so doing. He does not have to show at the time of service of the paragraph 21 notice an unassailable right to require removal.
Some support for this view is derived from paragraph 21(12). That subparagraph is important in two respects:
In practical terms, whether Wayne’s analysis is correct or not, where does that leave us?
All operators will attempt to use this case in negotiations, but such attempts should be pushed back. The Deputy District Judge’s decision is the lowest form of court decision and therefore is not binding on any other court. This means that developers and landowners should continue to serve paragraph 21 code notices in the same way as before. If an operator fails to serve a counternotice then this will give rise to an additional argument for the developer: that the operator has failed to comply with the provisions of the Code and therefore must remove its equipment.
Thekla Fellas, Partner, Fladgate LLP
Wayne Clark, Falcon Chambers