Case No. UKUT-152-(LC)-UTLC-Case-Number:-LC-2021-240

The reservation of rights to the superior landlord and to APW171.The draft leases reserve for the superior landlord a number of rights, for example to the use of conduits and service media on, under or through the Property, to shelter and support, to redevelop adjacent land, to move the access way and to enter the site in the company of On Tower’s representative in inspect, repair, etc or to re-route and replace conduits serving the superior landlord’s property. We refer to these as general reservations, being the reservations which it is agreed that the superior landlord shall have. There appear to be three issues between the parties.172.First, APW requires the same reservations to be made in its favour as are made for the superior landlord, even though it owns no land except the sites themselves at Audley House and Port Talbot; On Tower by contrast sets out separate rights for the superior landlord and the landlord. The latter at Audley House and Port Talbot are limited to the right on reasonable notice to enter the site at a mutually convenient time, accompanied by On Tower’s representative, for the purpose of good estate management or any other purpose connected with the lease or the reservations. For Huntingdon, On Tower’s drafting includes additional rights, similar to those of the superior landlord, because APW’s intermediate lease includes the additional surrounding land and the adjacent site.173.None of the existing agreements reserve rights for the superior landlord over the sites. APW’s intermediate leases reserve various rights to the superior landlord with a proviso that they are not to interfere with the rights granted under the existing or future under-leases.174.So far as Audley House and Port Talbot are concerned Mr Clark argues that if On Tower is entitled to future-proof the leases by including rights to upgrade the equipment then APW should also be permitted future-proofing by the reservation of rights in case it acquires adjoining land in the future.175.We see no reason for a site provider to have the benefit of reserved rights in favour of land that it does not own and has demonstrated no plans to own in the future; we are not aware that the Tribunal has imposed such a term in any other reference. We do not understand why such a term would be needed in order to prevent loss or damage to the site provider. Such reserved rights might be useful to it in future unforeseen circumstances but that is not what we have to provide for. As Mr Seitler QC says, the possibility of APW acquiring adjoining land at any of the sites is speculation (in contrast with On Tower’s known need to have the right to upgrade its equipment). Accordingly so far as Port Talbot and Audley House are concerned the general reservations shall be for the superior landlord only, and APW shall have the benefit of the separate reservation that On Tower is content for it to have. The same goes for Huntingdon, where the reservations in favour of APW are much more extensive in any event.176.The second point of dispute is that APW’s drafting includes two sub-paragraphs reserving the right for itself and the superior landlord (1) to enter the site to repair etc or divert service media or to install new conduits or service media, and (2) to undertake site inspections for the purposes of taking EMF (electric and magnetic fields) readings. 177.So far as that first right is concerned, it duplicates what is already set out in the general reservations and is to be deleted. As to the second, it is not understood why it is needed in addition to the rights, which On Tower’s drafting would give separately to both the landlord and the superior landlord, to enter the site for the purpose of good estate management or any other purpose connected with the lease. Again it is to be deleted. 178.The third dispute is whether the right, which both APW and the superior landlord have, to enter the property for the purposes of good estate management on notice to On Tower, to be exercisable without notice in case of emergency. Imagine a mast on fire. It is, as Mr Seitler QC points out, highly unlikely that APW would be present at any of the sites in an emergency so serious that it could not make a quick call to On Tower; if it was, the call it would make would be to the emergency services. However great APW’s expertise in the safety and management of telecommunications sites, the possibility of its being present at any of the sites in circumstances where both (1) the emergency was so great that On Tower could not be contacted and (2) APW itself had to hand the means of dealing with the emergency, is negligible. If those circumstances did arise and the emergency required intervention to save life, it is difficult to imagine that APW would be liable for the trespass. The provision is not to be included so far as APW is concerned, because it is not necessary to prevent or mitigate loss or damage to APW.179.The chances of such a reservation being a safe or useful one for the superior landlord to have are even more vanishingly remote, and the provision is not to be included so far as the superior landlord is concerned.The limitation of liabilities arising from the exercise of reservations 180.APW seeks the inclusion of a clause limiting its and the superior landlord’s liability to the tenant or any person using the equipment on the sites for any loss or damage arising from the exercise of reservations in the lease, except for physical damage to the installation or the site, anything as to which the law prevents the exclusion of liability, any claim in negligence or any breach of the provisions of the lease.181.So the exclusion clause is itself quite limited; a number of potential liabilities, notably for negligence on the part of APW and its employees and contractors, are not excluded. As Mr Seitler QC observes, the exceptions are so broad that it is difficult to see where the exclusion of liability would actually take effect. There is no corresponding provision in the existing leases or the intermediate leases.182.Mr Clark says that there is logic behind the exclusion; if the sites were not let, APW would have been able to exercise the rights that it now has by way of reservation, without fear of liability. That does not seem particularly logical to us; if the sites were not let it is unlikely that APW would have acquired them, and if the sites were not let then the potential for damage and injury from interference with On Tower’s equipment would not arise.183.APW has expertise in telecommunications sites and equipment; when it exercises the reservations it does so as a knowledgeable professional and it is difficult to see why its liability should be excluded, particularly in such an uncertain manner. The superior landlord has not sought such an exclusion in the agreements it has made. The clause is to be deleted.The cost of enforcing the Superior Landlord’s covenants184.The draft leases contain a covenant by APW to pay the rent reserved by and perform the covenants in the intermediate lease, and to use all reasonable endeavours to enforce the superior landlord’s covenants in that lease. APW says that if it is to use “all reasonable endeavours” to do so, that may involve expenditure and therefore enforcement should be at On Tower’s cost; by contrast if what is required is “reasonable endeavours” then it does not require that proviso.185.For On Tower it is argued that provision for “all reasonable endeavours” is appropriate because of the need for proper efforts to be made to enforce the superior landlord’s covenants in cases where for example access is being obstructed, and we agree. The issue is whether On Tower should have to pay for that. On Tower says that it should not, since APW has taken on the intermediate lease and the right to receive rent from the sub-tenant, and therefore should take on the burdens that go with that. On Tower does not wish to have to pay both to enforce covenants against APW and to enforce them against the superior landlord. For APW Mr Clark observes that the need for the clause is because under the new lease On Tower will have no direct contractual relationship with the superior landlord; the need to use APW to enforce the superior landlord’s covenants is not a reason to require APW to bear the costs of enforcing them.186.We do not accept APW’s arguments here. It took on the intermediate leases without any provision for anyone else to bear its costs of enforcing the covenants. It has actively chosen to be the landlord of a Code operator, it took the intermediate leases subject to the operator’s rights, and it is well aware of the operator’s business needs. We take the view that the grant of the new lease is not a reason for APW to acquire an additional right to have On Tower pay for the costs of enforcing the superior landlord’s covenants in the intermediate leases.187.Accordingly the requirement for “all reasonable endeavours” is to stand, and the requirement for On Tower to pay is to be deleted.