Following the release of the Vache Farm Upper Tribunal decision last week concerning renewal of a rural site, a First Tier Tribunal decision regarding a new rooftop site in Wimbledon has been released: Cornerstone Telecommunications Infrastructure Limited v Chartered Institute for Personnel and Development (2024) LC – 2024 -98. In this summary, we’ll refer to the parties as “CTIL” and “CIPD”.
Background and prior applications
The decision concerned CTIL’s application under paragraph 20 of the Electronic Communications Code (the “Code”) for new rights to install and operate telecommunications apparatus on the roof of CIPD’s charity headquarters in Wimbledon. The installation was required to deal with the loss of a nearby mast site.
In evidence it was confirmed that:
- CIPD was the sole occupier of the building, which was seeing reduced occupancy rates following the pandemic.
- CIPD had a fixed intention to sell the building (although the property was not currently being marketed) and evidence suggested that any buyer seeking to convert the building to multi-occupancy would require significant reconfiguration;
- The rooftop was crowded with M&E, leaving limited space for the proposed apparatus and the resultant design proposal involved mounting the apparatus on plinths;
- Urgent repair works were required to the roof. However there was some uncertainty about what works would actually be carried out because, having tendered those works, CIPD had ascertained that it could not afford to carry them out in full. The most likely outcome was that CIPD would carry out essential patch repairs prior to any sale.
The parties had originally been at odds over CTIL’s requests to survey and its request for interim rights to install under paragraph 26 of the Code. The Tribunal had imposed interim rights to survey but refused immediate interim installation rights.
CIPD initially opposed the imposition of the full Code agreement itself under paragraph 20 of the Code. However, by the time of the final hearing, CIPD had accepted the principle of an agreement to install but several terms of the Code agreement remained in dispute, principally, the break option, lift and shift and a condition precedent sought by CIPD due to the urgent repairs needed.
General approach where parties cannot agree on terms to be imposed – a balancing act
The Tribunal reiterated that where parties are seeking terms which are fundamentally incompatible, the likely loss and damage to the site provider is one factor to be considered along with the overall purpose of the Code and the extent to which any loss and damage can be compensated. One factor did not outweigh the other.
Terms in dispute and outcome
Redevelopment break option: The parties had agreed on an overall term of 10 years. CIPD sought a rolling redevelopment break option exercisable from day one on 18 months’ notice whilst CTIL asked that notice be served on or after the 5th year of the term (i.e. a 6.5 year term certain). CIPD’s evidence, provided by its finance director, was that it had a fixed intention to sell the building and any redevelopment would be carried out by a third-party buyer. CIPD referred to some limited evidence from Colliers about the possible timings for a sale and about market demand for single use offices of this size.
Taking into account CTIL’s investment in the installation, the Tribunal confirmed that a balance needed to be struck between terms which provide certainty to CTIL, and those that take account of CIPD’s future proposals for the building. The Tribunal therefore ordered a redevelopment break option on not less than 18 months' notice to expire on the fifth or any subsequent anniversary of the term commencement date.
Lift and shift: The parties agreed in principle that CIPD should have the right to seek removal and relocation of the cables and equipment to accommodate essential works. The parties could not agree on provisions relating to the relocation notice and who should pay for any relocation costs.
6 months was said to be a reasonable notice period for substantial works. The Tribunal also confirmed that it was not unreasonable to expect an operator to have to move the equipment at least twice during a 10 year term and for the operator to meet the costs of substantial relocations.
Condition precedent: CIPD sought to delay the installation works for a period while it decided the extent of the roof works that it could carry out; on this basis it was more efficient to do those works prior to any apparatus being installed. CIPD therefore proposed a provision which allowed it to serve notice to confirm whether it intended to undertake roof replacement works prior to the installation of any apparatus, CIPD would then have a further 6 months before the Code rights came into force.
On the basis that CTIL had lost critical infrastructure which it needed to replace without delay, the Tribunal deleted the condition precedent as this introduced an unhelpful avenue of uncertainty in circumstances where CIPD were unable to move ahead with roof replacement works anyway. Further certainty on the desire to carry out these works may have been given more consideration.
Design issues: Due to the design of the building, with its glass frontage, there was concern about the impact of the installation on safe access to the parapet and the cleaning and maintenance of the building’s façade. Despite detailed evidence and discussion between the parties at the hearing, the Tribunal accepted that there would need to be further discussion on the precise location of the balcony apparatus, but the Tribunal determined (primarily it seems based on CTIL’s evidence) that this issue should be capable of resolution and therefore rejected CIPD’s amendment to the edging for the wall mounted installation.
Other terms: Other terms including interference, notification of works, user, indemnity, powering down and road closure. Perhaps of most relevance was the commentary around the indemnity, a provision which is often a source of dispute between site providers and operators.
The Tribunal commented that the indemnity is to manage third party claims against the site provider arising from the unlawful acts and omissions of the operator. It rejected CTIL’s proposed wording which sought to expressly exclude losses which were not reasonably foreseeable on the basis that issues of remoteness of damage and foreseeability would be determined within the proceedings brought by a third party.
CMS Comment
We have particular sympathy for the site provider here; a charity which is left in the unenviable position of having a new Code agreement imposed after lengthy and expensive litigation (relating to the installation of apparatus from which it will derive no tangible benefit). This is set against the backdrop of substantial and urgent roof repair works being required and the building being earmarked for sale.
Overall, whilst the additional guidance from the Tribunal on lift and shift provisions, conditions precedent and indemnities is welcome, the decision is a bit of a mixed-bag for landowners. Our main takeaway from the decision is the importance of having the right evidence to support your proposals, particularly where you are seeking flexibility, including rolling redevelopment break options.
The Tribunal made it clear that to the extent that a site provider can put forward evidence of a potential redevelopment which could be thwarted by any delay in securing vacant possession, there may be a ‘compelling argument’ for a rolling break option on 18 months’ notice. If a site provider can put forward credible evidence for potential redevelopment, i.e. a report from an expert surveyor, feasibility studies or details of pre-application discussions with the planning authority, it will have a better chance of convincing the Tribunal of the need for flexibility. Following the theme of the Upper Tribunal decision in Vache farm, it is not the policy of the Code to stand in the way of development that will bring a building back into profitable use.
Links which may be of interest
See the full judgment here and a link to our summary of the Vache farm decision.
If this is of interest to you or your colleagues, Martin Garner and Charlotte Green will be hosting a short Webinar at 9.30am – 10.00am on 4 September 2024, giving practical tips to landowners in dealing with requests by telecoms operators – for more information and sign up details, click here.
Social Media cookies collect information about you sharing information from our website via social media tools, or analytics to understand your browsing between social media tools or our Social Media campaigns and our own websites. We do this to optimise the mix of channels to provide you with our content. Details concerning the tools in use are in our Privacy Notice.