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

193.The underlined wording is required by On Tower. It is argued that if On Tower is held liable under this clause for anything done in the exercise of its Code rights, that would be a derogation from APW’s grant. For APW it is argued that there would be no derogation since without the proviso APW is not giving On Tower the right to exercise its Code rights in a way that causes a nuisance. We express no view as to whether that is correct. 194.APW is also concerned that the inclusion of the proviso might cause it to incur liability under the intermediate leases for causing or permitting a nuisance. That is manifestly wrong; APW cannot be liable for permitting something by virtue of having a clause imposed upon it by the Tribunal.195.APW says that in adding that proviso On Tower is taking back with one hand what it is giving with the other. On Tower ought to be liable for all nuisance caused whether or not it is caused in the exercise of its rights under the leases. The answer to that point is that of course On Tower is so liable, under paragraph 25 of the Code and under other express provisions of the draft agreements. The debate about the function of this clause arises from a misunderstanding; the usefulness of the clause is in enabling APW to pursue On Tower in contract for any nuisance that it causes outside of the exercise of its Code rights; any nuisance caused by the exercise of the Code rights is amply provided for in paragraph 25 of the Code and cannot be extended because of the provision of paragraph 86 of the Code.196.Accordingly the proviso is to be included, but we re-word it as follows so as to make it clear that the proviso is simply excluding from the scope of the clause any nuisance caused by the exercise of the Code rights, without excluding liability altogether:“… provided that the proper and lawful use of the property in accordance with the terms of this lease for and in connection with the Permitted Use shall not give rise to liability under this clause.”Provision of planning applications 197.It is agreed that the leases shall require the tenant to secure any planning consents it needs in relation to the sites. In addition, APW wants the leases to require On Tower to notify it of any planning applications it makes in relation to the sites, and On Tower resists that amendment on the basis that it is an onerous requirement. There is no such provision in the existing leases and no requirement in the intermediate leases for APW to inform the superior landlord about planning applications made by the undertenant. APW’s ability to apply for planning permission is subject to the qualified consent of the superior landlord.198.It is difficult to see why such an additional requirement should be imposed. Mr Clark argues that APW, like any landowner, wants to know what is being done on its land. So it may, but of course planning applications are publicly available, and the planning authority will publicise the application where it is required to do so. 199.Mr Clark further argues that the intermediate leases provide not only that APW must get the superior landlord’s consent to any application it makes for planning permission, but also provide that “Any obligation in this lease not to do something includes an obligation not to agree or suffer that thing to be done and an obligation to use best endeavours to prevent that thing being done by another person”; he argues that if On Tower were to apply for planning permission without telling APW, APW could find itself in breach of its covenant not to suffer someone else applying for planning permission without the superior landlord’s consent.200.We disagree with that analysis. APW’s obligation not to apply for planning permission without the superior landlord’s qualified consent cannot be construed as an obligation not to permit anyone else to do so either. It cannot, for example, be an obligation to prevent a neighbour or a prospective purchaser from doing so, because such an obligation would be impossible to perform and is an implausible construction of the “not to agree or suffer” obligation. It cannot be an obligation to prevent On Tower under the existing leases from applying for planning permission without the superior landlord’s consent, because the intermediate leases are granted subject to the terms of the existing leases, which impose no such requirement. If the “not to agree or suffer” obligation is read as an obligation not to agree to a future sub-tenant applying for planning permission without the superior landlord’s consent (and we do not think it can be, but if it is), then such an obligation would not be broken when APW knew nothing about the application, nor would a breach be remedied by APW getting a copy of the application after it had been made as its proposed wording provides.201.APW will not be caused loss or damage by the absence of a provision for On Tower to give it copies of planning applications that On Tower makes in relation to the sites, and the provision to that effect is to be deleted.Control of proceedings 202.The draft agreements provide for On Tower to indemnify APW and the superior landlord against any liability of theirs to a third party arising from On Tower’s exercise of its rights under the agreement. On Tower’s wording gives it the right to defend any claim against APW or the superior landlord at On Tower’s cost and to settle any proceedings subject to APW’s prior qualified consent.203.APW’s preferred drafting deletes the right for On Tower to take control of proceedings, and provides that APW shall not settle any claim without On Tower’s qualified consent.204.The Tribunal in its decision in University of the Arts at paragraph 235 stated that it is not appropriate for the site provider to have sole control of proceedings where the operator is giving a substantial indemnity. On Tower’s wording should stand, as should APW’s, so that On Tower can take control of proceedings if it wishes to do so, but neither party can settle a claim without the other’s qualified consent.Break clauses 205.The leases are to be granted for a 15-year term. It is agreed that they shall define the “break date” as the seventh anniversary of the commencement of the term, and the provisions for termination of the agreement, set out later in the lease, give the tenant the right to bring the lease to an end at any time on or after the break date on giving 12 months’ notice. The agreement of the seven year break date absorbs most of the disagreement around the termination provision; the remaining areas of dispute are as follows.206.First, the termination clause also enables the tenant to terminate the lease where damage to the equipment on the site (not arising from the act or omission of On Tower itself) makes the exercise of its Code rights impossible. APW seeks a proviso that On Tower should first use its reasonable endeavours to reinstate the site or allow APW to do so at its cost. Such a provision is an unreasonable limitation on On Tower’s right to make its own decisions about its own equipment in the light of its own customer’s needs. The right to break in these circumstances is exercisable on twelve months’ notice, which can only be given if the damaged equipment has not been reinstated for 12 months. So APW will have two years to deal with the situation. The proviso that it seeks to add is not to be included in the agreements.207.Next, the termination clause also allows the tenant to give 12 months’ notice of termination if the exercise of the Code rights is impossible because of damage to or destruction of the access; APW seeks to include a proviso that the right to break in these circumstances arises only if the access has not been reinstated by the end of the notice period. The difficulty with that proviso is that the access might be unusable for eleven months of the notice period, during which time On Tower will have arranged for a substitute site, cleared the site of its customers and so on; if the access is then reinstated On Tower will be placed in an impossible position. APW’s worry that On Tower might break the lease because the access was unusable for one day is unrealistic; a short interruption could not be said to render the exercise of the Code rights impossible. The proviso sought by APW is impracticable and inimical to the aims of the Code and it is not to be included in the agreements.208.Third, the tenant’s right to break is required by APW to have no effect if “the Tenant has not handed back the Property with vacant possession”. The difficulty with this clause is that it is perfectly legitimate for the tenant to use the break clause not in order to leave the site but in order to secure a fresh agreement under Part 5 of the Code. The court in Vodafone Capital Limited v Hanover Capital Limited [202] EW Misc 18 (CC) at paragraphs 50 to 52, and in EE Limited v Hutchison 3G Limited v Morriss [2022] EW Misc 1 (CC) at paragraph 44 recognised that a proviso such as the one sought in these references would prevent the use of the break clause for that purpose and is not acceptable. If On Tower does break the lease and leave the site then of course APW is entitled to vacant possession and has remedies if that is not given. Accordingly the proviso sought by APW is not to be included.209.Finally, APW seeks the right to break the lease on or after the seven year break date on giving 18 months’ notice, if it seeks to redevelop all or part of the site, or neighbouring land belonging to the superior landlord or to APW itself; APW of course owns a small area around the sites at Huntingdon, and it is pointed out that it might acquire more land at the other two sites.210.On Tower resists this on the basis that there is no evidence that APW might want to redevelop, and on the basis that such a break would be contrary to the aims of the Code and would discourage investment in telecommunications sites. However, there is no indication in the Code that site providers are to be prevented from developing their land, or from exercising contractual rights to terminate agreements where they want to redevelop; and there is nothing to prevent them having such contractual rights. What the Code does do is to prevent the contractual termination from bringing Code rights to an end, so that even if APW does seek to redevelop its land or the nearby land it will still have to establish its right to recover possession by meeting the requirements of paragraph 31(4)(c) (“that the site providers intends to redevelop all or part of the land to which the code agreement relates, or any neighbouring land, and could not reasonably do so unless the code agreement comes to an end”). The break clause sought by APW is to be included, because the combination of the contractual right to break and the provisions of paragraph 31(4)(c) ensures that both parties’ interests are protected.Disputes 211.APW seeks to include in the leases a clause providing that “all questions and differences whatsoever” are to be determined by a single arbitrator to be appointed in default of agreement by the President of the RICS. There is a proviso that “nothing in this clause shall prevent either party from making an application … to the Tribunal under any provision of the Electronic Communications Code or to any other court for relief.”212.On Tower does not want this clause to be included. It is concerned about the potential delay in the appointment of an arbitrator, and Mr Seitler QC expresses the view that the proviso permitting access to the Tribunal or to the courts may not be wide enough. An arbitrator appointed by the RICS may not have the requisite legal knowledge to decide a dispute, and recent experience elsewhere (according to Mr Brearley) has shown that access to the courts may be needed.213.There is no dispute resolution clause in the Audley House lease; there are arbitration clauses in the Port Talbot and Audley House leases and an expert determination clause in APW’s intermediate leases.214.In our view the proviso to the clause is so wide that it would allow access to the courts in any event. This is of course important because either party may need an injunction or other urgent relief which cannot be managed by arbitration. The width of the proviso (“… or to any court for relief”) is such that the arbitration clause has no teeth; either party can always apply to the Tribunal or the court as appropriate. Equally the parties can appoint an arbitrator if they agree to do so. There is therefore no point in the inclusion of the clause and it is to be deleted.Rent review 215.It is agreed that there shall be a rent review every five years in each lease. 216.APW wants the review to be upwards only, and to the highest of the current rent, the open market rent for the site, or an index-linked rent based on the RPI. On Tower wants the review to be upwards or downwards and based only on the RPI.217.On Tower makes the point that a review to open market rent is likely to be time-consuming and not worth the trouble in the context of Code rents, and we agree. But Mr Clark points out that APW should get a true open market rent in the event that On Tower were to cease to be a Code operator, and we see the force in that submission even though it is an unlikely eventuality.218.Rent reviews will be upwards only as is usual in a commercial context, and will be the higher of the current rent and the rent reviewed in accordance with the RPI. If On Tower ceases to be a Code operator then the reviewed rent will be the higher of the current rent, the RPI-indexed rent, and the open market rent.