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

The Court of Appeal was asked to determine the legal effect of clause 2.1 of a written agreement dated 11 March 1997 for the installation and maintenance of telecommunications equipment. The clause provided for a Minimum Term of ten years and allowed either party to terminate by giving 12 months' notice to expire at any time on or after the expiry of that Minimum Term. The court held that, on a plain reading, the provision created a purported tenancy whose maximum duration was not ascertainable at the outset and was therefore void for uncertainty.

Applying the authorities, in particular Prudential Assurance Co Ltd v London Residuary Body and Mexfield Housing Co-Operative Ltd v Berrisford, the court concluded that the parties' agreement should take effect as a contractual licence rather than an inferred periodic tenancy. The court rejected the appellant's arguments that (i) Baroness Hale in Mexfield had limited the class of invalidating features to two specific types, (ii) the Agreement plainly created a valid term certain, and (iii) an annual periodic tenancy should be inferred. The Agreement was therefore held to be void as a tenancy and to operate as a contractual licence.

Background and facts:

• The Agreement dated 11 March 1997 granted rights to install and maintain telecommunications equipment on the owner’s land. It recorded exclusive possession of the site, provided for payment of a Tariff by quarterly instalments, and specified a Minimum Term of ten years. Clause 2.1 provided that the Agreement "shall continue for no less than the Minimum Term" and "may be terminated by either party giving to the other not less than 12 months' notice in writing to expire at any time on or after the expiry of the Minimum Term." A supplemental agreement increased the Tariff in November 2000.
• The parties before this court are assignees of the original parties.

Procedural posture:

• The matter came on appeal from the Upper Tribunal (Lands Chamber) [2024] UKUT 263 (LC), itself on appeal from the First-tier Tribunal (Property Chamber) (Judge D Jackson). The owner (appellant) sought a declaration that the Agreement created a valid tenancy (or that a periodic tenancy should be inferred) so that the tenancy would attract protection under Part II of the Landlord and Tenant Act 1954 and a higher rent than under the Electronic Communications Code.

Issues framed by the court:

1. Whether clause 2.1 created a term certain so as to give rise to a valid tenancy.
2. If the term was void for uncertainty, whether a periodic tenancy should be inferred (as in Prudential) or whether the parties' arrangement should instead be given effect as a contractual licence (as in Mexfield).
3. How clause 2.2 and other terms (Payment Days, Tariff calculation, successors in title) affected interpretation.

Court’s reasoning and conclusions:

• The court first undertook ordinary contractual construction. Clause 2.1 unambiguously created a minimum ten-year term which could be terminated by 12 months' notice expiring on any day on or after the Minimum Term. That wording meant that the maximum duration of the tenancy could not be ascertained at inception and was therefore uncertain.
• On binding authority, a tenancy lacking a term certain is void. The court considered Prudential and Mexfield and concluded that, where the agreement can coherently be given effect as a contractual licence reflecting the parties’ express intentions, that solution should be adopted rather than inferring a periodic tenancy that the parties did not plainly create. The Agreement’s other terms (Payment Days, the Tariff calculation date, and the express Minimum Term wording) were not consistent with an annual or daily periodic tenancy from inception and therefore did not support an inferred periodic tenancy.
• The court therefore dismissed the appeal and upheld the decision that the agreement operated as a contractual licence rather than a tenancy or an inferred periodic tenancy.

The court noted that the outcome has wider consequences for numerous similar site agreements, and observed the parties’ and earlier judges’ dissatisfaction with the result, but concluded that the relevant authorities and contractual construction compelled the outcome.

Appeal dismissed. The Master of the Rolls held that clause 2.1 unambiguously created a minimum ten-year term terminable by 12 months' notice to expire on any day on or after the expiry of the minimum term; because the maximum duration was not ascertainable at the outset the purported tenancy was void for uncertainty. Applying Prudential and Mexfield, the court gave effect to the parties' agreement as a contractual licence rather than inferring a periodic tenancy.

Appeal to the Court of Appeal from the Upper Tribunal (Lands Chamber) (Mr Justice Edwin Johnson, President) [2024] UKUT 263 (LC), which itself heard an appeal from the First‑tier Tribunal (Property Chamber) (Judge D Jackson). The Court of Appeal delivered judgment on 25 July 2025 ([2025] EWCA Civ 971).