AP Wireless II (UK) Limited v On Tower UK Limited

For the purposes of Part 5 of the Electronic Communications Code, a lawful assignee of the benefit of a subsisting licence is treated as the operator who is a party to the code agreement where it occupies the site in place of the assignor and has assumed primary responsibility for performing the licence obligations, including payment of the licence fee.

A bare assignment, or an assignment accompanied only by payment accepted by the site provider, is insufficient. Paragraph 12(1) regulates the manner in which code rights are exercised; it does not transfer the burden of the licence agreement. An applicant must also prove that the agreement was validly assigned. Undisputed occupation and payment of rent do not cure a failure to establish title.

On Tower had obtained the benefit of three pre-28 December 2017 licence agreements and served notices under paragraph 33 of the Code seeking new agreements. The First-tier Tribunal held that On Tower was a party to each code agreement, relying principally on its occupation of the sites and payment of licence fees.

AP Wireless appealed. The principal issue was whether an assignee of the benefit of a subsisting licence could be treated as the operator who was a party to the code agreement without a covenant with the site provider to perform the licence obligations. A second issue concerned whether On Tower had proved title to a further agreement at Ampthill.

1. First Issue. The FTT’s reasoning was flawed. It wrongly equated the enjoyment of code rights with being a party to the code agreement and wrongly treated the reasoning in Vodafone Ltd v Potting Shed Bar and Gardens Ltd ("Gencomp") as supporting an assignee having only the benefit of a licence.
2. The better construction of Part 5 is that a lawful assignee of the benefit of a licence is treated as the operator who is a party to the code agreement where the assignee occupies the site in place of the assignor and has assumed primary responsibility for complying with the licence obligations. That responsibility may arise through a covenant with the site provider, a covenant with a predecessor, or a covenant with the assignor, including an indemnity covenant.
3. A mere assignment of the benefit, or assignment coupled with payment of the licence fee accepted by the site provider, is insufficient. In a bare assignment, the assignor remains the relevant operator for Code purposes until the assignee assumes primary responsibility. The result concerns the operation of Part 5 and does not determine the parties’ liabilities under the general law.
4. Paragraph 12(1) concerns the terms and conditions governing the exercise of a code right and the statutory immunity in paragraph 12(2). It does not make the operator subject to the burden of the licence agreement generally. The FTT’s alternative reasoning under paragraph 12 was therefore wrong. The benefit and burden principle likewise did not apply to the independent licence obligations.
5. On Tower appeared to have assumed responsibility under the 2019 block transfer, but the factual issue had not been determined. If the parties could not agree, that issue could be returned to the Tribunal.
6. Second Issue. On Tower bore the burden of proving that it was the tenant under the Ampthill lease. The earlier 2013 assignment from Orange to EE was inconsistent with Orange’s later purported assignment to Arqiva. Occupation and payment of rent did not prove a valid assignment or establish sufficient title. No estoppel argument had been pleaded or determined below. APW’s appeal on Ampthill was allowed.

• First-tier Tribunal (Property Chamber): held that On Tower was a party to the relevant code agreements and had standing under paragraph 33 of the Code; it also held that On Tower had sufficient title at Ampthill.
• Upper Tribunal (Lands Chamber): held that the FTT’s reasoning on the First Issue was wrong, but that the result could stand if On Tower had assumed primary responsibility for the licence obligations; allowed APW’s appeal on Ampthill.