EE Limited & Anor v David Paul Stephenson & Anor

Under the Electronic Communications Code, consideration for a new agreement must be assessed on the statutory no-network assumption. Evidence of real-world telecommunications lettings will usually be unsuitable because those transactions reflect the network use which the assumption requires to be ignored. A restrictive covenant limiting use to communications purposes need not be disregarded where it still permits communications uses outside an electronic communications network.

The Tribunal may grant unrestricted upgrading and sharing rights where proposed restrictions would obstruct the Code’s objectives and do not materially reduce loss or damage to the site provider. Consideration is the statutory price for occupation. It does not permit additional compensation for being unable to make an alternative use of the site itself.

EE Limited and Hutchison 3G UK Ltd sought, under paragraph 34 of the Code, a new lease of an existing rural telecommunications mast site at Pendown Farm. The landowner had granted AP Wireless II (UK) Ltd an intermediate lease, restricted to communications use, and APW was the appropriate party to grant the new Code lease.

The parties agreed the principle of a new ten-year lease but disputed several terms, the annual consideration, and compensation. The principal issues were the effect of the user covenant on the paragraph 24 valuation, upgrading and sharing rights, a redevelopment break, and APW’s asserted loss of an opportunity to develop its own mast.

1. A new lease was ordered. It was to be for ten years, subject to the terms determined by the Tribunal. The annual rent was £750, with RPI review provisions and an open-market rent review if the lease ceased to be held for Code purposes.

2. The unrestricted rights to upgrade equipment and to share occupation of the site sought by EE/H3G were appropriate. The conditions in paragraph 17 set minimum upgrading and sharing rights; they were not a ceiling. On this remote rural site, APW had shown no real prospect of loss or damage. The proposed qualifications would impede technological development and invite disputes, contrary to the Code’s objectives and the requirement in paragraph 23(5).

3. The lease was also to include an unrestricted emergency-generator right, APW’s wider third-party indemnity, a redevelopment break exercisable after five years, and an express protection that sharing arrangements would not bind APW to Code rights acquired by a sharer. The disputed repairing-on-notice clause was omitted as pointless.

4. For paragraph 24 consideration, the Tribunal held that the communications-use covenant in APW’s intermediate lease remained relevant. It did not prevent all non-network communications uses, and the statutory hypothesis could operate without disregarding it. Real-world telecommunications transactions were generally unsuitable comparables because they necessarily reflected network value. Applying the structured valuation approach and treating the site as an unexceptional rural mast site, the Tribunal fixed rent at £750 annually.

5. APW could not recover compensation merely because the imposed lease prevented it from exploiting the site itself for an alternative use. Consideration was the statutory market value of the rights. A possible claim for injurious affection to APW’s neighbouring set-down land was neither properly pleaded nor evidenced. The Tribunal made no determination, leaving APW free to advance a properly formulated future claim if advised.

not stated in the judgment.