In CTIL v Compton Beauchamp, the Supreme Court confirmed that an operator with an existing lease agreement (that is an agreement in force when the New Code was enacted) cannot ‘pick and choose’ which statutory regime to renew under, and will (or perhaps rather, should) either have the benefit of the 1954 Act or the New Code when it comes to renewal, there is no right to use the two regimes in parallel. However, once a new lease comes into being, that agreement will be a ‘code agreement’ with the protection of the New Code.
What if an operator is unsuccessful in a 1954 Act renewal? Can it go on to gain access to the New Code’s benefits by making a fresh application for a new code agreement under Part 4, which enables operators who do not already have an agreement to ask site owners to grant them one?
This was the argument brought by one operator, On Tower Limited, against its landlord, Gravesham Borough Council, in a recent case which was heard on appeal in the Upper Tribunal (Lands Chamber).
Background
The council was the freehold owner of a block of residential flats in Northfleet, which had a telecommunications mast site on the roof. The mast site was demised pursuant to a lease, which was protected by the security of tenure provisions under the 1954 Act and which was continuing under the Part 2 provisions. The current operator, On Tower Limited, had been assigned the continuation tenancy in 2017, prior to the New Code coming into force.
The council wished to undertake works to the roof of the building, to prevent water from leaking into the flats below. It failed to reach agreement with the operator, and subsequently sought to terminate the tenancy by serving a Section 25 Notice on 30 June 2022.
The operator resisted termination and applied to the County Court for a new tenancy on the Site. The claim was issued by the County Court, and returned to the operator’s solicitors for service within 4 months of issue as per the CPR.
For various reasons, the operator’s solicitors failed to serve the claim within the requisite time limit and had to make an application requesting an extension of time for service. This raised the question as to whether the tenancy was still continuing, or whether the proceedings were “determined”, such that section 64 of the 1954 Act operated to terminate the tenancy 3 months later. This was critical, as this would mean that the operators had lost their right to get a new lease under the Act.
The operators were told that they couldn’t ‘switch lanes’ and renew under Part 5 of the New Code. To protect their position, the operators therefore served notices under Part 4 of the New Code, asking the council to consent to a New Code agreement (including a request to grant temporary code rights under Paragraph 27).
The council disputed their ability to do so, and the claim was referred to the First Tier Tribunal. The council applied to strike out the request, on the basis that an operator who had exhausted the 1954 Act procedure could not then get a ‘second bite of the cherry’ under the New Code, the Judge refused that claim but granted permission to appeal.
Case decision
The tribunal held that, just as an operator cannot use the renewal machinery under each statutory regime simultaneously, neither can an operator attempt to use them concurrently, and if the 1954 Act procedure was unsuccessful, that was to be the end of it.
Fortunately, for the operator, the Judge also held that in 1954 Act proceedings, where a claim form is not served within the 4-month timeframe, the consequence is not that the tenancy will come to an end under section 64, instead, a Judge must make an order to continue or determine (as appropriate) the proceedings.
WolfBite - the key takeaway
The case will be a relief for the landowner community. Where landowners are successful in opposing telecoms renewals, or an operator otherwise loses their ability to renew under the 1954 Act, they will find no sanctuary in Part 4 to re-apply to acquire code rights ‘via the backdoor’.
It will also be a welcome clarification to those dealing with 1954 Act renewals (in particular, tenants), as to what the consequence will be if proceedings are issued but not served - namely that the fate of the continuation of a tenancy will rest in the hands of the Judge.
