LC-2023-000815 - [2024] UKUT 263 (LC)

Paragraphs 8-10 of the Grounds of Appeal -methodology

In my analysis of the arguments in paragraphs 8-10 of the Grounds of Appeal, I shall adopt the same overall approach as the Judge, which was also (notwithstanding APW’s criticisms of the Judge in paragraph 7 of the Grounds of Appeal) the approach of the parties in their arguments. By this I mean that I will divide up my analysis of the provisions of each Agreement into separate sections, grouping the provisions in the form most convenient to my analysis. I will then stand back and consider each of the Agreements in its entirety, in order to determine, subject to my decision on the Term Issue in relation to the 1997 Agreement, whether the Judge was right to decide that the Agreements took effect as licences rather than leases.

In working through the provisions of each of the Agreements I do not consider it necessary to set out an express analysis of every single provision in each Agreement. While all the provisions of each Agreement have been taken into account in my analysis, I will, in common with the Judge and the parties, concentrate on those provisions which are most relevant to the determination of whether the Agreements took effect as licences or leases. While it is convenient to take equivalent or similar provisions in each Agreement in the same sections of my analysis, and while there is a considerable overlap in the analysis of the provisions of each Agreement, it is necessary, as the Judge pointed out at Paragraph 4, to keep in mind that each Agreement falls to be considered separately.

I also reiterate that the principal question under consideration is whether each Agreement took effect as the grant of exclusive possession of land to Orange. It is not in dispute that the 2002 Agreement was entered into for a term which qualified as a term certain, at the equivalent of a rent. For the purposes of considering paragraphs 8-10 of the Grounds of Appeal I will make the same assumption, of a term certain at the equivalent of a rent, in relation to the 1997 Agreement. Whether this assumption is correct in relation to the 1997 Agreement, so far as a term certain is concerned, will depend upon my decision on the Term Issue, to which I shall come.

This therefore leaves, so far as the Appeal is concerned, the question of whether either of the Agreements took effect as the grant of exclusive possession of land. Where I refer in my analysis to matters pointing towards a lease or a licence I am, as a general rule and with some exceptions, referring to the question of whether the relevant Agreement took effect as the grant of exclusive possession of land.

References to Clauses in my analysis, without more and where differentiation by Agreement is not necessary, are references to the clauses which appear with the same letter or number in each Agreement.

Paragraphs 8-10 of the Grounds of Appeal – Clause B and the plans attached to the Agreements

At Paragraph 26 the Judge noted that there were no words of demise in either Agreement. Instead, as the Judge saw matters, Clause B simply granted a bundle of rights. The Judge concluded that the absence of a demise pointed strongly to both Agreements being licences. So far as the plans annexed to the Agreements were concerned, the Judge took the view that these plans did not function to demarcate or identify any property being leased. In the view of the Judge the plans had a different function, which the Judge explained at Paragraphs 32-34:

“32.

Most conveyances, transfers and leases have a plan showing the property edged red – usually for identification only. The plan functions to identify and demarcate the property being sold or leased. Plans usually show external features such as nearby roads or houses so that what is being sold /leased can be readily ascertained.

33.

However, the 3 plans annexed to the Supplemental Agreement do not fulfil that function. It is impossible to tell where the site is in relation to the farms themselves itself let alone the wider landscape. That is because what are referred to as plans are not plans as understood by either parties or a conveyancer. They do not identify or demarcate. Instead, they are highly technical drawings containing detailed specifications of landscaping, antenna, dishes, feeder cables and even a plan of the headframe complete with lighting finials and LNA Units. What the Respondent says are plans to demarcate the demise are in fact detailed technical specifications of the telecommunications equipment to be installed.

34.

The same observations apply to the plan annexed to the 2002 Agreement. Granted it is described as “Site Plan”, but it does not identify where the site is, nor does it demarcate it. Again, it is a technical specification of the telecommunications apparatus to be installed containing details such as electricity requirements, equipment schedule, final antenna key etc. (Again, the position in the two references before me is in contrast to the plans in references LC-2023-000323 and 332 at pages 1027 and 1049 of the Trial Bundle.)”

The Judge thus concluded, at Paragraph 36 that the nature of the plans was inconsistent with a demise, and that the plans pointed strongly towards a licence granting rights to install telecommunications apparatus.

So far as Clause B is concerned, I take the Judge’s point. In the case of each Agreement Clause B is expressed to grant rights in relation to the installation and operation of telecommunications equipment. There is not, in the case of either Agreement and at least in express terms, the demise of an area of land. There is no express demise of, to adopt Mr Radley-Gardner’s expression, “a cube of air”. I accept that, on its wording, Clause B is expressed to grant a bundle of rights.

This however seems to me to take matters only so far. The absence of specific words of demise is not, in my view, decisive. What matters is the overall substance and effect of what is granted by each Agreement. No specific words are necessary to create a lease. What is important is that there must be words used which show an intention to demise; see Woodfall’s Law of Landlord and Tenant, Volume 1, at 5-017.

In the case of each Agreement the rights which were expressed to be granted were tied to an identified area of land; namely the Sandbach Site in the case of the 1997 Agreement and the Lubbards Site in the case of the 2002 Agreement. Equally, in the case of each Agreement, the Agreement drew a distinction between the Site, in respect of which rights were granted to Orange, and the Premises. The expression “the Premises” referred to land in the ownership of Mr Thornhill, in the case the 1997 Agreement, and to land in the ownership of the Pinkertons, in the case of 2002 Agreement. Each of the Sites formed part of the Premises. In the case of each Agreement, Orange was granted various rights of access and/or service rights over the Premises, for the purposes of installing and operating its telecommunications equipment on the relevant Site.

Turning to the plans I do not agree with the Judge’s analysis, nor with the Judge’s conclusions that the plans were inconsistent with a demise under a lease and pointed strongly towards a licence. I have spent some time analysing the plans earlier in this decision. The key points which emerge from that analysis, for present purposes, seem to me to be as follows.

Starting with the 1997 Agreement the 1997 Sandbach Plan, as annexed to the 1997 Agreement, is not available. It is however clear that there was such a plan; see Clause A of the 1997 Agreement. It is also clear that the 1997 Sandbach Plan showed the Sandbach Site, by some sort of red edging. What is also important is that the land identified in red on the 1997 Sandbach Plan can be identified by looking at the 2000 Sandbach Plans. As I have already explained, I accept the point made by Mr Radley-Gardner that, in the construction of a contract, subsequent dealings between the parties cannot, as a general rule, be taken into account; see Sattar v Sattar, as quoted earlier in this decision. As I have also explained however, it seems to me that this general principle does not preclude the use of the 2000 Sandbach Plans and the 2000 Supplemental Agreement as evidence of what land was shown as the Sandbach Site on the 1997 Sandbach Plan. Nor does this general principle preclude the use of the evidence of Mr Powell and the photographs for the same purpose.

I refer back to my analysis, earlier in this decision, of the identification of the Sandbach Site. By reference to the inferences which I have drawn, the Sandbach Site, as identified by the 1997 Sandbach Plan, was an enclosed area of compound occupying part of the existing enclosed area of compound. The original enclosed area of compound can be seen on the Sandback Landscaping Plan, described as “EXISTING COMPOUND”. The Sandbach Site was then enlarged by the 2000 Supplemental Agreement to the enclosed area of compound which remains in place, as seen in the photographs, and as can also be seen on the Sandbach Landscaping Plan, marked as “PROPOSED COMPOUND EXTENSION”.

I therefore conclude, in the case of the 1997 Agreement, that the land in respect of which and for the benefit of which the bundle of rights in Clause B of the 1997 Agreement was granted was identified as a particular area of land; namely the Sandbach Site as originally constituted. The effect of the 2000 Supplemental Agreement was to increase the extent of this area of land, to the defined area shown on the Sandbach Landscaping Plan.

It seems to me that it is also clear that the Sandbach Site, both as originally constituted and as enlarged by the 2000 Supplemental Agreement, was identified as and was intended by the parties to be a fenced compound. So far as the 2000 Supplemental Agreement is concerned, this is clear from the Sandbach Site Plan and the Sandbach Landscaping Plan. In the case of the 1997 Agreement it is clear from the 2000 Sandbach Plans that the Sandbach Site had, at least by the time of the 2000 Supplemental Agreement, become a fenced compound. There is however the evidence of Mr Powell, reporting what he had been told by Mr Thornhill, namely that the Sandbach Site had always been fenced off and that the original timber stock fence had been upgraded to the wire fence which can now be seen. This is also consistent with Clause 5.1.8 in the 1997 Agreement, which required Orange both to erect and maintain a stock fence to fully enclose the PCN Equipment.

The same analysis applies in the case of the 2002 Agreement. I refer back to my earlier analysis of the identification of the Lubbards Site. On the basis of that analysis I conclude that the land in respect of which and for the benefit of which the bundle of rights in Clause B of the 2002 Agreement was granted was identified as a particular area of land; namely the Lubbards Site. I also conclude that the Lubbards Site was identified as and was intended by the parties to be a fenced compound. This is clear from the Lubbards Compound Plan and from the obligation in Clause 5.1.6 of the 2002 Agreement to erect a stock proof fence around the Telecommunications Equipment.

Mr Radley-Gardner sought to support the Judge’s approach to Clause B and the plans, by arguing that the plans were intended to do no more than give an indication of the areas in which the rights granted by the respective Agreements could be exercised. I am not able to accept this submission, for the same reasons as I disagree with the Judge’s analysis. It seems to me that the relevant language in each of the Agreements, together with the evidence of the plans themselves, contradicts this submission. In the case of each of the Agreements, the bundle of rights granted by Clause B was granted in respect of a specified area.

The Judge made reference, at Paragraph 35, to the Edelwind decision in his analysis of the plans attached to the Agreements. I assume that the Judge’s point was that Edelwind involved an agreement to install and operate telecommunications equipment on the roof of a building. Judge Cooke decided that the agreement did not grant exclusive possession of any part of the roof to the operator, and took effect as a licence only. The essential reasoning of Judge Cooke can be found in paragraphs 59 and 60 of her decision:

“59

I take the view that there is no grant of exclusive possession of the roof. The second respondent has unrestricted access to it save for the exclusion zones which are in place for safety purposes and for the cabinet (which is the operator’s property in any event). The operator can access the roof only within certain hours, and therefore, as Mr Clark says, the agreement cannot be said to be conferring a right to occupy the roof, let alone to grant exclusive possession of it. The second respondent’s covenant not to enter the equipment cabinet is consistent with its not having granted exclusive possession (if it had, the covenant about the cabinet would not be needed). The right to inspect the equipment on notice is about inspection of the equipment, not about possession. The provisions for fee review, the warranty of title and the alienation covenant are perfectly consistent with a licence. The contracting out of the Landlord and Tenant Act 1954 is no more determinative of the matter than is the declaration that the agreement is not a lease; the parties have expressed themselves both ways, but the substantive provisions of the agreement make it clear that this is a licence not a lease.

60

Ms Tozer QC argued that the demise itself is restricted to the exclusion zones and to the area occupied by the cabinet. The difficulty with that is that when the parties entered into the primary Code agreement they did not know where the exclusion zones were; the first claimant was obliged to provide them. And the plan shows only the proposed location of the cabinet. So it is impossible to regard the agreement as conferring exclusive possession of any defined area. Moreover, the subject matter of the primary Code agreement is the whole rooftop. To regard it as a lease of the area occupied by the cabinet and of the exclusion zones, with the rest of the rooftop being subject to ancillary rights perhaps by way of licence or easement, is an unrealistic description and a mischaracterisation of the agreement. This was a licence agreement extending to the whole roof.”

It seems to me that the decision in Edelwind is clearly distinguishable, in the case of both Agreements. The agreement in Edelwind was a very different type of agreement, which gave the operator the right to install and operate telecommunications equipment on a roof. In the present case each of the Agreements went much further than this, granting a bundle of rights over and for the benefit of a defined area of land which was to be an enclosed area of land, enclosing the relevant telecommunications equipment.

I accept Mr Radley-Gardner’s point that a licence may give an occupier a great deal of territorial control of a site, without amounting to a lease. In my judgment however the extent of the control which Orange was given over each of the Sites, by the respective Agreement, points strongly against either Agreement being a licence. In this context Mr Radley-Gardner relied upon Manchester Airports Plc v Dutton [2000] QB 133, where it was decided by the Court of Appeal, by a majority, that a licensee was entitled to an order for possession against environmental activists who had occupied the land in respect of which the licensee, the airport company, had been granted a licence. It is however important to keep in mind the terms of the licence which was granted in Dutton. The licence was granted to the airport company in order to allow it to go on to the relevant land and carry out work of topping, lopping and felling trees, in order to ensure that the relevant land, which was near the proposed second runway at Manchester Airport, did not present obstacles to the use of the runway. It seems to me that there is an obvious contrast between an agreement of this kind, and an agreement allowing an operator of telecommunications equipment to come on to a demarcated and enclosed area of land, and use that land for the operation of the telecommunications equipment.

Drawing together all of the above analysis I disagree with the Judge’s conclusions, both in relation to Clause B and in relation to the plans. My own analysis is as follows:

Paragraphs 8-10 of the Grounds of Appeal – the fencing obligations

I have already mentioned the fencing obligations in, respectively, Clause 5.1.8 of the 1997 Agreement and Clause 5.1.6 of the 2002 Agreement. In my view, and for the reasons set out in the previous section of this decision, these fencing obligations point in the direction of a lease rather than a licence.

It is worth adding two points, specifically in the context of the fencing obligations.

First, both the Sandbach Site and the Lubbards Site are located in open country. They are not urban sites. Nor are they sites located on the roof of a building. Nor are they confined to a single structure such as a tower. It is clear from the photographs of the Sites that the Sandbach Equipment and the Lubbards Equipment each comprise a substantial set of telecommunications equipment. It is also clear from the security on each Site that it is considered necessary to take measures to exclude people from coming into either Site. It is reasonable to assume that these matters were also true of the PCN Equipment and the Telecommunications Equipment. As the Judge recorded, at Paragraph 43, the owner of the respective Premises, as defined in each Agreement, also has no key to the relevant Site. The Judge regarded this as a red herring; see Paragraph 43:

“43.

The absence of the provision of a key to the Respondent or its predecessor in title is a red herring. The factual background – the installation of electronic communications apparatus and business common sense are crucial. As the signs observed by Mr Powell indicate “NO ENTRY UNAUTHORISED PERSONS” and “CAUTION RADIO TRANSMITTERS OPERATING”. It would clearly be wholly inappropriate for unauthorised persons to have access to such highly technical and potentially dangerous equipment. The absence of a key is business common sense to protect the equipment from damage and persons from harm. It is not, as it would be in the case of a lease relating to a parcel of land, an unequivocal assertion of possession.”

I do not agree with this analysis. It seems to me that the enclosed nature of the Sites and the obligation imposed upon Orange, in the case of each Agreement, to ensure such enclosure, points towards a lease rather than a licence. Putting the matter more specifically, it seems to me that the enclosed nature of the Sites and the fencing obligations support the argument that each Agreement took effect as the grant of exclusive possession of the relevant Site, rather than as the grant of a bundle of non-exclusive rights to install and operate telecommunications equipment on the Sites.

Second, the Judge considered that the circumstances of the present case were different from Seddon v Smith. The Judge’s essential reasons for reaching this conclusion can be found in Paragraph 42:

“42.

The obligation in both agreements is to fence the equipment. It is not an obligation to fence the site. It is clear that the intention of the parties that it was the Equipment that was to be protected. The incidental consequence of course is that the site was enclosed. But that was not the intention of the parties. The operator wished to keep its valuable Equipment safe from the problem of “rural” crime and the site owner wished to ensure that livestock and potentially anyone walking in the fields was not injured by the presence of high voltage electrical Equipment. The circumstances are different from Seddon v Smith. The intention was not possession of the site but protection of the Equipment.”

I do not agree with this analysis. While I can see that the fencing obligations were directed to ensuring that the telecommunications equipment was kept secure, rather than fencing off the bare land itself, this strikes me as a distinction without a difference. The fact was that the parties to the Agreement contemplated and agreed that the Sites should be enclosed, given the use to which the Sites were to be put. The facts of Seddon v Smith were somewhat different. In that case it was found that the plaintiff had acquired title to certain land, by adverse possession, by carrying out farming activities on the land. The statement that enclosure is the strongest possible evidence of adverse possession appears in the judgment of Cockburn CJ, where the point being made by Cockburn CJ was that the plaintiff’s farming activities had been sufficient to found adverse possession, whether or not the plaintiff had enclosed the relevant land. There may be many reasons why parties may agree that land which one of the parties is to occupy should be enclosed and secure. This does not seem to me to alter the fact that there will be, in any such case, enclosure. Whether such enclosure supports an argument that there was a grant of exclusive possession of the relevant land will depend upon all the circumstances of the relevant case. What I cannot see is that such enclosure is excluded from constituting evidence of a grant of exclusive possession simply because the enclosure was required for a purpose such as protecting sensitive telecommunications equipment.

Paragraphs 8-10 of the Grounds of Appeal – rights of access

The relevant Clause in the 1997 Agreement is Clause 4, which is in the following terms:

“4.1

The Owner shall permit Orange its employees agents and independent contractors full and free access on reasonable notice (except in emergency including emergency maintenance when no notice shall be required) to all parts of the Premises as are reasonably necessary for the installation operation maintenance repair and renewal of the PCN Equipment at all times provided that all such persons will comply with such reasonable security and safety procedures as are required by the Owner and Orange agrees to meet all additional reasonable costs incurred by the Owner in providing such access.

4.2

Orange shall permit the Owners reasonable access to the Site by prior appointment for inspection purposes only.”

Clause 4.1 of the 1997 Agreement is concerned with Orange’s rights of access. Clause 4.2 of the 1997 Agreement is concerned with the Owner’s rights of access. As can be seen, the Owner’s rights of access are limited to reasonable access to the Sandbach Site by prior appointment for inspection purposes only. This is strongly suggestive of a lease. If the 1997 Agreement took effect as a licence, so that Orange did not have exclusive possession of the Lubbards Site, it would be odd to find the owner of the Lubbards Site having access only by prior appointment and for inspection purposes only.

Turning to the 2002 Agreement, the relevant clause is Clause 4.1, which provides as follows:

“4.1

Orange shall permit the Owner reasonable access to the Telecommunications Equipment by prior appointment for inspection purposes only.”

The Judge considered, at Paragraph 46, that there was a significant difference between Clause 4.1 of the 2002 Agreement and Clause 4.2 of the 1997 Agreement, in that Clause 4.1 of the 2002 Agreement refers to the Telecommunications Equipment. The Judge cited the decision of Judge Cooke in Edelwind, at paragraph 59 (which I have quoted above) where Judge Cooke considered that the right to inspect the equipment on notice was about inspection of the equipment, not about possession. I have no quarrel with this analysis of Judge Cooke in Edelwind but, as I have explained, Edelwind was a very different case. In the present case the rights of inspection in Clause 4.1 of the 2002 Agreement were created in a very different context. The Telecommunications Equipment was not to be sited on a roof but within a fenced compound, access to which was restricted. It seems to me that whether Clause 4.1 of the 2002 Agreement had referred to the Lubbards Site or to the Telecommunications Equipment, the reality was that the access to the Lubbards Site would have been similarly restricted. In these circumstances I do not consider that the absence of reference to the Site in Clause 4.1 of the 2002 Agreement is significant. In the case of the 2002 Agreement it seems to me that the reality was that the Owner was being granted similarly restricted rights of access to those to be found in Clause 4.2 of the 1997 Agreement, in terms strongly suggestive of a lease.

Paragraphs 8-10 of the Grounds of Appeal – the absence of rights to share use of the Sites

Clause 8 in each of the Agreements contains provisions which deal with the ability of the Owner to install their own equipment or grant consent to any third party to install equipment. Each Clause is in materially the same terms, and I need only quote Clause 8 from the 1997 Agreement:

“8.1

Nothing in this Agreement shall prevent the Owner installing or granting consent to any third party to install any equipment at the Premises (but not the Site) provided that:

8.1.1

prior to the Owner installing or granting any such consent the Owner shall consult with Orange and take account of any representations made by Orange as to possible interference with the operation of the PCN Equipment, and

8.1.2

if after the installation of such equipment Orange can demonstrate to the Owner’s reasonable satisfaction that such equipment is interfering with the operation of the PCN Equipment then the Owner shall procure such other equipment is switched off with immediate effect and remains switched off until such interference is cured.

8.2

If the PCN Equipment is installed on a Site where other equipment is already installed and the Owner can demonstrate to Orange’s reasonable satisfaction that the PCN Equipment is interfering with the operation of such other equipment then Orange shall switch off the PCN Equipment with immediate effect and such equipment shall remain switched off until such interference is cured. If Orange cannot reasonably cure such interference then it may by written notice terminate this Agreement with immediate effect.

8.3

In the event of interference occurring Orange shall use its reasonable endeavours to achieve or co-operate in achieving technical resolution.

8.4

For the purpose of this clause “interference” shall include but not be limited to electrical electromagnetic or mechanical interference.”

It will be noted that Clause 8.1 does not give the Owner any right to install equipment on either of the Sites. What Clause 8.1 does is to confirm that the Owner can install equipment or licence a third party to install equipment at “the Premises (but not the Site)”. The effect of this is that there is no right of shared use of either of the Sites. Equipment can be installed adjacent to the Sites, but not within the Sites. The remainder of Clause 8 then deals with the problems which may arise from interference caused by having two sets of equipment in proximity.

The Judge considered that Clause 8.1 supported OT’s case that both Agreements were licences granting rights and not leases granting exclusive possession; see Paragraph 55. I do not agree. It seems to me that Clause 8.1 is more consistent with the argument the Agreements granted exclusive possession of the Sites to Orange. Clause 8.1 makes it clear that the Owner has no right to share use of the Sites, either directly or by a third party. This falls to be contrasted with other provisions in each Agreement which make it clear, by contrast, that Orange was granted a variety of rights to share use of the Sites; see Clauses 7.4 - 7.8 of the 1997 Agreement and see Clauses 7.3, 7.4 and 7.6 of the 2002 Agreement. These provisions seem to me to be consistent with Clause 8.1 and to provide further support for the argument that the Agreements granted exclusive possession of the Sites to Orange, so that Orange was entitled, if it so chose, to share use of the Site with others. The Owner, by contrast, had no such rights.

Paragraphs 8-10 of the Grounds of Appeal – chattels

I deal with chattels next because there seems to me to be an overlap between the way in which the Agreements deal with chattels and my analysis of the provisions of the Agreements in sections (ii) – (v) above.

Clause 7 of the 1997 Agreement is headed “OPERATING CONDITIONS”. It contains, in particular, the following two provisions relating to the PCN Equipment:

“7.3

On the termination of this Agreement however caused Orange will vacate the Site and remove therefrom all PCN Equipment and shall if required by the Owner reinstate the Site to its former state and condition as at the date hereof to the reasonable satisfaction of the Owner.”

“7.5

For the avoidance of doubt the PCN Equipment shall belong to Orange as if it were a tenant’s fixture.”

The equivalent provisions in the 2002 Agreement are in Clause 7 of the 2002 Agreement, which is also headed “OPERATING CONDITIONS”:

“7.2

Upon vacating the Site Orange shall remove therefrom all of the Telecommunications Equipment and shall if required by the Owner reinstate the Site to its former state and condition as at the date hereof (fair wear and tear excepted) to the reasonable satisfaction of the Owner.”

“7.7

For the avoidance of doubt the Telecommunications Equipment shall remain the property of Orange at all times.”

In this context APW’s counsel relied, as they did before the Judge, upon the case of Gilpin v Legg [2017] EWHC 3220 (Ch) [2018] L&TR 6, a decision of His Honour Judge Paul Matthews, sitting as a Deputy Judge of the Chancery Division. The case was concerned with huts which rested on concrete blocks on the landowner’s fields. A dispute arose between the landowner and the occupiers of some of the huts as to the status of their occupation. This in turn raised an issue as to whether the huts were chattels, or had become annexed to the land on which they stood. The judge decided that the huts were chattels, on the basis that there was not a sufficient degree of annexation to the land for the huts to have become part of the land. The judge also decided that the occupiers had tenancies of the land on which the huts stood. The judge considered that the fact that the huts were chattels was not inconsistent with the occupiers having tenancies of the land on which the huts stood. The judge also decided that the huts themselves had the status of tenant’s fixtures.

For present purposes the key part of the judge’s reasoning in Gilpin can be found in his judgment at [64], where the judge was considering the lease/licence question. The relevant part of his reasoning on this question, at [64], was in the following terms:

“64

On the face of it, those three characteristics are present here, in all the claimants’ cases. First, whether or not the huts are chattels (which I have already discussed above), in practice they occupy the same space throughout the whole time that they are in use. That means that the land which they sit on is not available for occupation or any other use by the landowner, who is therefore excluded. Accordingly, where a landowner grants the right to another person to site a hut or chalet of this kind, movable in practice only on the termination of the right, on his land, he is in substance granting a right to exclusive possession. Whilst that right subsists and is being enjoyed, the landowner cannot possibly use or exploit the land in any other way. It is in this sense like a claimed easement to park a car in a specified parking space: Batchelor v Marlow [2003] 1 W.L.R. 764, CA.”

The argument of APW’s counsel was that this reasoning applies equally in the present case. The effect of the Agreements was to leave both Sites exclusively occupied by telecommunications equipment which was to remain Orange’s property, and which did not have to be removed until termination of the Agreement (the 1997 Agreement) or until Orange vacated (the 2002 Agreement). Although the 2002 Agreement refers to Orange vacating the Lubbards Site, it seems to me that this effectively meant that Orange did not have to remove the Telecommunications Equipment until termination of the 2002 Agreement. As such, it seems to me that the relevant provisions in Clause 7 of each Agreement are in effectively the same terms.

The Judge rejected this argument. As he said, at Paragraph 50:

“However, clauses 7.5 and 7.7 are also consistent with a bundle of rights to install electronic communications equipment as set out in the other terms of both agreements. The factual matrix is crucial. Under both the 1997 and 2002 Agreements there is a distinction between use of land in accordance with a bundle of rights and occupation of that land.”

The Judge went on to make reference to the decision of the Tribunal in EE Limited and Hutchison 3G Limited v London Borough of Islington [2019] UKUT 0053 (LC). In this case the Tribunal (Martin Rodger KC, Deputy Chamber President, and AJ Trott FRICS) made the following observations, at [44] and [45], in the course of their discussion of the wide range of forms of agreement by which code rights might be granted:

“44.

As Mr Read argued on behalf of the claimants, the circumstances in which Code rights may be required are diverse, and it is not surprising that Parliament should not have adopted a prescriptive approach to the form in which they may be granted. At one end of the spectrum Code rights may involve going on to land for a short period to cut back trees or to carry out a survey (which was the full extent of the Code right sought in Cornerstone Telecommunications Infrastructure Ltd v The University of London) for which it would not be necessary to acquire an interest in land. At the other end Code rights may involve keeping cabinets, masts and other electronic communications apparatus installed on land for a period of years, thereby effectively excluding the owner of the land from the area required. It may not be essential that such extensive rights be granted by lease, but the evidence of practice under the old code demonstrates that it will often be convenient.

45.

On the other hand, the right to keep equipment installed on land does not necessarily involve a grant of exclusive possession. For example, the land on which an automated teller machine is located in a supermarket is capable of being concurrently in the occupation of the bank which owns the machine and the store which hosts it and to involve no grant of exclusive possession: see Cardtronics Europe Ltd v Sykes (VO) [2018] EWCA Civ 2472 at [81].”

The observation of the Tribunal that the right to keep equipment installed on land does not necessarily involve a grant of exclusive possession seems to me uncontroversial. Whether a grant of exclusive possession is involved will depend upon all the relevant circumstances, including the nature of the equipment involved. It would clearly be unrealistic to describe land occupied by an automated teller machine or, say, a vending machine, located in the middle of a supermarket or other premises open to the public, as land in the exclusive possession of the owner of the teller machine or vending machine. These are not however the facts of the present case. The present case involves two sites which are and were intended to be enclosed, for the purposes of housing telecommunications equipment which was substantial and needed to be enclosed in order to allow its safe and secure operation and to ensure the protection of the general public. Essentially, the telecommunications equipment with which the present case is concerned is at the other end of the spectrum to an automated teller machine or a vending machine.

On the face of it therefore, the fact that the Agreements gave Orange what might reasonably be described as an exclusive right to keep and operate its telecommunications equipment on each of the Sites might be thought to support the argument that the Agreements did grant exclusive possession of the Sites to Orange. The Judge did not accept this, for the reason which he gave, which was that the factual matrix was crucial. Specifically, the Agreements each granted a bundle of rights to Orange to make use of the Sites, as opposed to a right of occupation of the Sites.

I do not agree with this reasoning. I refer back to my analysis of Clause B and the plans attached to the Agreements. As I have explained, I do not see the wording of Clause B in each Agreement as indicative of a licence. In the case of each Agreement the bundle of rights granted was extensive. The wording of Clause B seems to me, if viewed in isolation, to be neutral, in terms of pointing either to a lease or a licence. As I have also explained, if Clause B is considered with the evidence of the plans which were attached to the Agreements, the position is more suggestive, in the case of each Agreement, of a lease than a licence. I do not think that the point made by APW’s counsel in this context loses its force simply because Clause B can be characterised as a bundle of rights. The question in this context is whether the grant of that bundle of rights amounted to a grant of exclusive possession of each of the Sites.

Applying the reasoning of Judge Matthews in Gilpin, it seems to me that it is important in the present case that the Agreements gave Orange what, as I have said, might reasonably be described as an exclusive right to keep and operate its telecommunications equipment on each of the Sites. I do not think that this importance is diminished by the terms of Clause B, for the reasons which I have explained.

In summary, it seems to me that the provisions of the Agreement which confirm Orange’s ownership of the telecommunications equipment on the Sites and Orange’s right to maintain that telecommunications equipment until termination of the relevant Agreement, go to support the argument that the Agreements did grant exclusive possession of the Sites to Orange.

I state this conclusion however in advance of considering the rights of relocation of the telecommunications equipment and redevelopment of the Site which were reserved to the Owner by the Agreements. I therefore now turn to those rights of relocation and redevelopment.

Paragraphs 8-10 of the Grounds of Appeal – rights of relocation and redevelopment

Both of the Agreements contain provisions which grant rights of relocation and redevelopment to the Owner.

In the case of the 1997 Agreement Clauses 2.2 and 2.3 provide as follows:

“2.2

Notwithstanding the provisions of clause 2.1 Orange may terminate this Agreement at any time on not less than 3 months’ prior written notice expiring on a Payment Day in the event of circumstances arising such that the Site is no longer suitable for the operation of PCN Equipment including (but not limited to) the erection of new buildings or environmental changes to the area in which the Site is located or the complete or partial destruction of the Site.

2.3

In the event that a redevelopment of the Site is to take place the Owner agrees to consult with Orange and agree to a suitable relocation of its PCN Equipment with the Premises. If a relocation is not possible then the Owner shall have the right to terminate this Agreement at any time upon giving not less than 12 months prior written notice to Orange.”

In the case of 2002 Agreement Clauses 2.3 – 2.5 provide as follows:

“2.3

Orange may terminate this Agreement at any time giving the Owner not less than 3 months prior written notice in the event of circumstances arising such that the Site is no longer suitable in Orange’s reasonable opinion for the operation of the Telecommunications Equipment including (but not limited to) the erection of new buildings or environmental changes to the area in which the Site is located or the complete or partial destruction of the Site.

2.4

If at any time before the expiry of the fifth year of the Term the Owner requires to carry out any refurbishment, alteration or improvement to any part of the premises or any redevelopment as defined in Section 55 of the Town and Country Planning Act 1990 upon any part of the Premises upon which the Telecommunications Equipment is situated and has (if necessary) obtained valid planning permission for the same but is prevented from carrying out such work or redevelopment by reason of the existence of the Telecommunications Equipment the Owner may serve on Orange notice (“the Diversion Notice”) requiring the Telecommunications Equipment to be relocated upon the Premises within a timetable to be agreed between the parties PROVIDED THAT Orange shall receive a minimum of 24 months notice of such relocation (such notice to expire on or before expiry of the fifth year of the Term).

2.5

The Owner will endeavour to relocate the Telecommunications Equipment in a location which is not less satisfactory to Orange than its position as shown in the Plan and shall take account of Orange’s reasonable requirements in this respect.

Upon expiry of a Diversion Notice Orange will at the Owners expenses relocate the Telecommunications Equipment in accordance with the said timetable will make good any damage caused to the Site and the Premises to the reasonable satisfaction of the Owner.

If pursuant to these provisions the Telecommunications Equipment is relocated on another part of the Premises and this new location proves to be unsuitable for the operation of the Telecommunications Equipment then Orange may by written notice terminate this Agreement with immediate effect.

If pursuant to these provisions the Telecommunications Equipment is removed from the premises this Agreement shall automatically terminate and the obligations of the Parties under this Agreement shall cease.”

The Judge accepted the submission of Mr Radley-Gardner that what the Judge referred to as “this qualified right for the site owner to require relocation” was inconsistent with exclusive possession; see Paragraph 56 – 58.

I do not think that the position is quite as straightforward as this.

Starting with the 1997 Agreement, Clause 2.2 is a break clause, which applies in the circumstances specified in Clause 2.2. It seems to me that this break clause is capable of being consistent with a lease or a licence.

Clause 2.3 of the 1997 Agreement requires more analysis. Pursuant to Clause 2.3 of the 1997 Agreement, if a redevelopment of the Sandbach Site is to take place the Owner has the right to terminate the 1997 Agreement, on 12 months prior written notice to Orange. The condition precedent to this right of termination is that the Owner must consult with Orange and seek to agree to a suitable relocation of the Sandbach Equipment within the Premises. If a relocation is not possible, then the right to terminate can be exercised by the Owner. While I can see the point that Clause 2.3 gives the Owner a right to require a relocation of the Sandbach Equipment, and that this can be said to be inconsistent with a grant of exclusive possession, I am not convinced of the force of this point. The important point seems to me to be that the right of relocation in Clause 2.3 can only be exercised in the event of a redevelopment of the Sandbach Site. There is no general right to require relocation of the Sandbach Equipment.

There is, in my view, a contrast to be drawn between the 1997 Agreement and the agreement which was under consideration in Dresden Estates Ltd v Collinson (1988) 55 P&CR 47. In this case the defendant, Mr Collinson, sought to argue that he had a lease of a workshop and store which he occupied pursuant to an agreement with the plaintiff, Dresden Estates Limited, the owner of the premises. The agreement gave an unfettered right to Dresden to require Mr Collinson to transfer his occupation to other premises within the adjoining property owned by Dresden, and also to increase what was described as the licence fee payable under the agreement. The argument that the agreement created a lease was rejected by the Court of Appeal, essentially because the right to require Mr Collinson to relocate to other premises was considered incompatible with a lease. As Glidewell LJ explained, at page 53 of the report:

“What is even more important is to decide what clause 4(b) and also clause 4(f) mean. Clause 4(b) is the clause that starts by saying in terms: "This Licence confers no exclusive right for the Licensees to use and occupy the premises." It then goes on to give Dresden Estates Ltd. The right:

. . . from time to time on giving the Required Notice to require [Mr. Collinson] to transfer his occupation to other premises within [Dresden's] adjoining property.

Clause 4(f) entitles Dresden Estates Ltd. by giving the required notice to increase the licence fee to such amount as the notice may specify. Both those clauses, if they have their apparent meaning, are inconsistent with there beinga tenancy. You cannot have a tenancy granting exclusive possession of particular premises, subject to a provision that the landlord can require the tenant to move to somewhere else. The landlord can only do that by terminating the tenancy and creating a new one in other premises. So, too, with regard to the rent and licence fee. It is axiomatic that unless there is a rent review clause a landlord cannot for the duration of the tenancy alter the rent unilaterally. All he can do is to terminate the tenancy and then enter into a new agreement for the letting of the same premises at a new rent. Of course, the whole thing can be done by agreement. The tenancy agreement itself cannot give a landlord the power to alter a rent unilaterally.”

In the present case Clause 2.3 of the 1997 Agreement does not give the Owner an unrestricted right to relocate the Sandbach Equipment. Rather, Clause 2.3 of the 1997 Agreement gives the Owner the right to terminate the Agreement if a redevelopment of the Sandbach Site is to take place, subject to the condition precedent of seeking to agree a suitable relocation of the Sandbach Equipment within the Premises. If a relocation is not possible, the right of termination can be exercised.

A further point to keep in mind in this context is that paragraph 20 of the Old Code permitted the landowner, by notice given to the operator, to require the alteration of the relevant apparatus “on the ground that the alteration is necessary to enable that person to carry out a proposed improvement of the land in which he has an interest”. Paragraph 1(2) of the Old Code provided that references to the alteration of apparatus in the Old Code included references to the moving, removal or replacement of the apparatus. Paragraph 20(1) of the Old Code provided that this statutory right to require alteration could be exercised “notwithstanding any agreement binding that person”. This right could not therefore be excluded by agreement, although it could be varied by agreement; see the analysis of Recorder Sharp KC in PG Lewins Limited v Hutchison 3G UK Limited and EE Limited (County Court at Bristol – 9^th March 2018), in paragraphs 27 – 43 of the Recorder’s judgment in that case, in particular at paragraph 29. It is reasonable to assume that the parties had the provisions of the Old Code in mind when they entered into the 1997 Agreement. It seems to me that Clause 2.3 should be viewed as the version of the right of alteration, in paragraph 20 of the Old Code, upon which the parties had agreed. Viewed in this light, I do not think that it is right to characterise the qualified right in Clause 2.3 as inconsistent with the grant of exclusive possession. Clause 2.3 set out a version of the right of alteration in paragraph 20 of the Old Code which, as the parties can be taken to have known, would have applied to the 1997 Agreement in any event.

In my view the overall outcome of the above analysis is that Clause 2.3 of the 1997 Agreement is properly put into the same category as Clause 2.2; that is to say a clause which is capable of being consistent with a lease or a licence.

It seems to me that the same analysis applies to Clauses 2.3 – 2.5 of the 2002 Agreement. Clause 2.3 of the 2002 Agreement granted a right of termination to Orange in the event of circumstances arising such that the Sandbach Site was no longer suitable in Orange’s reasonable opinion for the operation of the Telecommunications Equipment.

Clauses 2.4 and 2.5 are more complex, but the important point is that they did not contain any unqualified right for the Owner to require the Telecommunications Equipment to be relocated. Instead, Clause 2.4 gave the Owner the right to require relocation of the Telecommunications Equipment in the event of the Owner requiring to carry out works of the kind specified in Clause 2.4. Clause 2.5 contained provisions dealing with the relocation of the Telecommunications Equipment, assuming the service of a valid Diversion Notice, with Orange having the option to terminate the 2002 Agreement if the new location for the Telecommunications Equipment proved to be unsuitable. By the final part of Clause 2.5, as I construe the same, the 2002 Agreement was also to terminate if the Telecommunications Equipment was removed from “the premises”, which I take to mean the Premises as defined in the 2002 Agreement. It also seems clear to me that the provisions of Clause 2.5 did not operate independently of Clause 2.4. The provisions of Clause 2.5 were only engaged if Clause 2.4 was engaged.

The right of relocation in Clause 2.4 has long since expired, given that it was expressed to be capable of exercise if the Owner required to carry out works of the kind specified in Clause 2.4 during the first five years of the term of the 1997 Agreement.

In relation to both sets of relocation provisions Mr Radley-Gardner made the fair point that, if the Agreements did take effect as leases, the rights of relocation in each Agreement do not explain what is to happen to the lease created by the relevant Agreement, if the rights of relocation are exercised or, in the case of the 2002 Agreement, were exercised before their expiration date. As he pointed out, if the Agreements did take effect as leases, relocation of the premises the subject of those leases would, in each case, appear to have required the surrender of the existing lease and the grant of a new lease. Neither Agreement however contained any agreement to that effect. I can see the force of this point. It seems to me that the only answer to this point, consistent with the Agreements having taken effect as leases, is to construe the relocation provisions as having the effect of working an implied surrender and regrant of the relevant lease, in the event that the relocation provisions were operated. It is however necessary to keep in mind that, as with the other provisions of the Agreements, the question I am answering is whether the provisions of each Agreement point to the relevant Agreement having taken effect as a lease or a licence. While I can see the force of Mr Radley-Gardner’s point, I can see an answer to the point (the implied surrender and regrant referred to above), and the point has to be considered in the context of the overall structure of rights of redevelopment and relocation to be found in Clause 2 of each of the Agreements. Ultimately, I am not persuaded that Mr Radley-Gardner’s point tips the scales in favour of a licence, so far as the redevelopment and relocation provisions in each Agreement are concerned.

In my view the outcome of the analysis is the same for Clauses 2.3–2.5 of the 2002 Agreement as it is for Clauses 2.2 and 2.3 of the 1997 Agreement. Clauses 2.3–2.5 of the 2002 Agreement are capable of being consistent with a lease or a licence.

Paragraphs 8-10 of the Grounds of Appeal – successors in title

Clause 10.1 of the 1997 Agreement provides as follows:

“10.1

It is the intention of the parties that this Agreement shall continue to bind their respective successors in title”

Clause 10.1 of the 2002 Agreement contains a very similar provision:

“10.1

This Agreement shall bind the respective successors in title of the parties and those deriving title under them.”

A large part of the written and oral submissions for the hearing of the Appeal was devoted to the question of whether these Clauses were consistent with the Agreements, if the Agreements were assumed to have taken effect as licences. The arguments on this question ranged widely.

I start with the relevant part of the Decision. The Judge dealt with this question at Paragraphs 64 – 72. I should also make reference, in this context, to Paragraphs 64 – 66, which are relevant to this part of the Judge’s reasoning because they deal with the question of whether the Agreements could be assigned. The Judge’s conclusion, at Paragraph 72, was that Clause 10.1 in both Agreements, by the references to binding successors in title, was indicative of a lease.

Turning to the arguments of the parties, as they were presented in the Appeal, Mr Holland’s argument was that if the Agreements took effect as licences, Clause 10.1 in each Agreement was meaningless. A licence is a personal agreement. A party cannot be a successor in title in relation to a licence because there is no title to succeed to. Equally, the burden of the obligations in a licence is not, under the general law, capable of assignment. If the Agreements took effect as leases, these problems did not arise. The benefit and burden of the obligations in the Agreements would have passed to the respective successors in title of the Owner and Orange, as in the case of any other lease. Clause 10.1 is therefore consistent, and only consistent with the Agreements taking effect as leases.

In response to this Mr Radley-Gardner deployed various arguments to the effect that, when the legal position was properly analysed, Clause 10.1 in each Agreement was not inconsistent with the Agreements taking effect as licences.

The starting point is the well-established principle of law that the burden of a contract cannot be assigned. For a restatement of this principle, I refer to the judgment of Beatson LJ in Budana v Leeds Teaching Hospitals NHS Trust [2017] EWCA Civ 1980 [2018] 1 WLR 1965, at [118]. The benefit of a contract can be assigned and, in the present case, there was no provision in either Agreement which prevented the benefit of the Agreement being assigned. If however the Agreements took effect as licences, assignment of the burden of the obligations in each Agreement would, without more, appear to have been prevented by the principle of law that the burden of a contract cannot be assigned.

Beyond this, it is also the case that the use of the expression “successor in title” is not apt to a licence. There is no title to which an assignee of the licence can succeed; see the analysis of this expression in the judgment of Nugee LJ in the Potting Shed case, at [48] and [49]. The analysis was not directly concerned with licences, but it seems to me to follow from the analysis that it is not apt to speak of a successor in title to a licence. This point also applies to the reference to “those deriving title under” such successors in title, in Clause 10.1 of the 2002 Agreement. On the Owner’s side the reference to a successor in title did make sense, because an assignee from the Owner of the benefit of the Agreements could be expected to be a party which had acquired the Owner’s title to the Sites. On Orange’s side the position was different. If the Agreements took effect as licences, they conferred no title to the Sites upon Orange. On that hypothesis, Orange and any assignee from Orange of the benefit of the Agreements had no more than a set of personal contractual rights to use the Sites.

Turning to the Old Code this also contained provisions concerning the extent to which rights under the Old Code were binding upon parties other than the original parties to the relevant code agreement. Paragraph 2(3) and (4) of the Old Code provided as follows:

“(3)

If a right falling within sub-paragraph (1) above has been conferred by the occupier of any land for purposes connected with the provision, to the occupier from time to time of that land, of any telecommunication services and-

(a)

the person conferring the right is also the owner of the freehold estate in that land or is a lessee of the land under a lease for a term of a year or more, or

(b)

in a case not falling within paragraph (a) above, a person owning the freehold estate in the land or is a lessee of the land under a lease for a term of a year or more has agreed in writing that his interest in land should be bound by the right,

then, subject to paragraph 4 below, that right shall (as well as binding the person who conferred it) have effect, at any time when the person who conferred it or a person bound by it under sub-paragraph (2)(b) or (4) of this paragraph is the occupier of the land, as if every person for the time being owning an interest in that land had agreed in writing to the right being conferred for the said purposes and, subject to its being exercised solely for those purposes, to be bound by it.

(4)

In any case where a person owning an interest in land agrees in writing (whether when agreeing to the right as occupier or for the purposes of sub-paragraph (3)(b) above or otherwise) that his interest should be bound by a right falling within sub-paragraph (1) above, that right shall (except in so far as the contrary intention appears) bind the owner from time to time of that interest and also-

(a)

the owner from time to time of any other interest in the land, being an interest created after the right is conferred and not having priority over the interest to which the agreement relates; and

(b)

any other person who is at any time in occupation of the land and whose right to occupation of the land derives (by contract or otherwise) from a person who at the time the right to occupation was granted was bound by virtue of this sub-paragraph.”

The effect of these provisions was that a successor in title of the relevant landowner and grantor of the relevant code rights would be bound by the grantor’s obligations in the relevant code agreement. By paragraph 2(5) such a successor in title would also have the benefit of grantor’s rights under the relevant code agreement, independent of any assignment of the benefit of those rights.

Pausing at this point, and before coming to the arguments of Mr Radley-Gardner, the legal position would appear to have been as follows, in terms of the transmission of the benefit and burden of the obligations in the Agreements, at the time when each of the Agreements was entered into:

This brings me to Mr Radley-Gardner’s arguments on this particular question.

Mr Radley-Gardner’s first argument was that the presence of Clause 10.1 did not point either way. As he pointed out in his skeleton argument, if anything the need to state that successors in title were bound by the provisions of each Agreement was more consonant with a licence agreement, on the basis that if the Agreements had been intended to be leases, it would not have been considered necessary to spell this out. I will come back to this argument. At this stage I confine myself to the observation that this point seems to me to have some merit. I say this for two reasons. First, I can see something in the argument that, in the case of a lease, it is not normally necessary to spell out that successors in title are bound. Such is the nature of a lease. Second, Mr Radley-Gardner’s first argument was a useful reminder that the question with which I am concerned, in the context of Clause 10.1 as in the context of all the other provisions of the Agreements, is whether Clause 10.1 is indicative of a lease or a licence. I am not, at least directly, concerned with the question of whether the benefit and burden of each Agreement was fully capable of transmission. It was easy to lose sight of this point, in the complex arguments of counsel over the transmissibility or otherwise of benefit and burden of the Agreements.

Mr Radley-Gardner’s second argument was that Clause 10.1 has to be considered in the context of the Old Code and, now, the Code. As I have already noted, code rights can be conferred by a number of different types of legal relationship, including leases and licences. Mr Radley-Gardner submitted that the Old Code and the Code cannot have the effect of giving agreements within the Code, which are identical in substance, different legal effects. I accept this argument, so far as it goes. I accept that Clause 10.1 should be construed against the background of the Old Code, which was in force when the Agreements were entered into. Indeed, I have adopted this approach in my analysis of the Agreements. I therefore accept that the provisions of the Old Code are relevant, so far as they affected the transmissibility of the benefit and burden of the Agreements. I also accept the point of principle that the Old Code and the Code should not have had the effect of giving agreements, identical in substance, different legal effects. The question which remains, to which I shall return, is the extent to which these points impact upon the question of whether and, if so, to what extent Clause 10.1 points to the Agreements being leases or licences.

Mr Radley-Gardner’s third argument, or more accurately set of arguments, engaged directly with the question of the transmissibility of the benefit and burden of the Agreements. Mr Radley-Gardner argued, on various bases, that it was legally possible for the burden of Orange’s obligations under the Agreements to have passed to assignees of Orange. As such, the parties could easily be understood to have thought that the Agreements had the effect set out in Clause 10.1, notwithstanding that they were intended to be licences.

In this context Mr Radley-Gardner made reference to the principle of mutual benefit and burden. His argument was that a party could not have taken an assignment of the benefit of the Agreement from Orange without also accepting the burden of the Agreement. The benefit and the burden comprised mutual sets of rights and obligations which could not be separated in this way. This doctrine of mutual benefit and burden has been explained by the courts in a number of cases. The following restatement of the doctrine, by Sir Andrew Morritt C in Davies v Jones [2009] EWCA Civ 1164 [2010] 1 P&CR 22, at [23], is particularly helpful:

“23.

In Rhone v Stephens [1994] 2 A.C. 310 a successor in title to the original covenantee sought to enforce a covenant to repair a roof against the successor in title to the original covenantor. Lord Templeman, with whom the other four members of the Appellate Committee agreed, noted that equity cannot, any more than the law, compel an owner to comply with a positive covenant entered into by his predecessor in title. He then referred to the ‘pure principle of benefit and burden’ enunciated by Sir Robert Megarry V-C and continued:

“I am not prepared to recognise the "pure principle" that any party deriving any benefit from a conveyance must accept any burden in the same conveyance. Sir Robert Megarry V.-C. relied on the decision of Upjohn J. in Halsall v. Brizell [1957] Ch. 169. In that case the defendant's predecessor in title had been granted the right to use the estate roads and sewers and had covenanted to pay a due proportion for the maintenance of these facilities. It was held that the defendant could not exercise the rights without paying his costs of ensuring that they could be exercised. Conditions can be attached to the exercise of a power in express terms or by implication. Halsall v. Brizell was just such a case and I have no difficulty in wholeheartedly agreeing with the decision. It does not follow that any condition can be rendered enforceable by attaching it to a right nor does it follow that every burden imposed by a conveyance may be enforced by depriving the covenantor's successor in title of every benefit which he enjoyed thereunder. The condition must be relevant to the exercise of the right. In Halsall v. Brizell there were reciprocal benefits and burdens enjoyed by the users of the roads and sewers. In the present case clause 2 of the 1960 conveyance imposes reciprocal benefits and burdens of support but clause 3 which imposed an obligation to repair the roof is an independent provision. In Halsall v. Brizell the defendant could, at least in theory, choose between enjoying the right and paying his proportion of the cost or alternatively giving up the right and saving his money. In the present case the owners of Walford House could not in theory or in practice be deprived of the benefit of the mutual rights of support if they failed to repair the roof.”

Thus Lord Templeman stressed that conditions may be attached to the exercise of a right or power by express terms or by implication, thereby recognising that, as Sir Robert Megarry had considered, the question is one of construction of the relevant instrument or transaction. Even so, as Lord Templeman pointed out, the condition must be relevant or reciprocal to the exercise of the right.”

In this part of his judgment in Davies v Jones the Chancellor went on to refer to further authorities in which the doctrine of mutual benefit and burden has been considered. In particular, the Chancellor cited Thamesmead Town Ltd v Allotey (1998) 30 HLR 1052, in which Peter Gibson LJ stressed the need for (i) a correlation between the relevant burden and the benefit the successor in title has chosen to take and (ii) the ability of the successor in title to choose whether or not to take the benefit. The Chancellor summarised the conditions to be satisfied, if the doctrine of mutual benefit and burden was to be applied, in the following terms at [27]:

“27.

Rhone v Stephens and Thamesmead Town Ltd v Allotey are binding on us. They establish a number of propositions the application of which are exemplified in the other cases to which I have referred, namely Halsall v Brizell, that part of Tito v Waddell which was not disapproved in Rhone v Stephens, Jenkins v Young Bros Transport Ltd and Baybut v Eccle Riggs Country Park Ltd. In my view those propositions are:

(1)

The benefit and burden must be conferred in or by the same transaction. In the case of benefits and burdens in relation to land it is almost inevitable that the transaction in question will be effected by one or more deeds or other documents.

(2)

The receipt or enjoyment of the benefit must be relevant to the imposition of the burden in the sense that the former must be conditional on or reciprocal to the latter. Whether that requirement is satisfied is a question of construction of the deeds or other documents where the question arises in the case of land or the terms of the transaction, if not reduced to writing, in other cases. In each case it will depend on the express terms of the transaction and any implications to be derived from them.

(3)

The person on whom the burden is alleged to have been imposed must have or have had the opportunity of rejecting or disclaiming the benefit, not merely the right to receive the benefit.”

In my view the doctrine of mutual benefit and burden could not have been relied upon in the present case for the purposes of ensuring that the burden of Orange’s obligations under the Agreements passed to an assignee, from Orange, of the benefit of the Agreements. It seems to me that it is impossible to shoehorn the entire network of rights and obligations in the Agreements into a close relationship of the kind required to engage the doctrine of mutual benefit and burden. While I appreciate that Mr Radley-Gardner’s argument was that the parties could easily be understood to have thought that the transmissibility of the burden of the Agreements from Orange to an assignee could have been effected by the application of the doctrine of mutual benefit and burden, I am not able to accept this argument. It seems to me unrealistic to think that the parties could have had this understanding. If the burden of the Agreements was to be capable of transmission to assignees of Orange, I do not see how the parties to the Agreements or those advising the parties could have understood that this result would be achieved by the operation of the doctrine of mutual benefit and burden.

Mr Radley-Gardner also sought to rely upon the provisions of the Old Code and the Code to fill the apparent gap in the transmissibility of the burden of Orange’s obligations under the Agreement.

For this purpose Mr Radley-Gardner relied upon paragraph 2(5) of the Old Code, which provided as follows:

“(5)

A right falling within sub-paragraph (1) above shall not be exercisable except in accordance with the terms (whether as to payment or otherwise) subject to which it is conferred; and, accordingly, every person for the time being bound by such a right shall have the benefit of those terms.”

In relation to this argument Mr Radley-Gardner also relied upon paragraph 12(1) of the Code:

“(1)

A code right is exercisable only in accordance with the terms subject to which it is conferred.”

Mr Radley-Gardner sought to rely on paragraph 2(5) and paragraph 12(1) of the Code, to argue that code rights granted to an operator are, in any event, imprinted with the obligations subject to which those rights have been granted. As such, an assignee of Orange would not have been able to take the benefit of Orange’s rights under the Agreements without also taking the burden of Orange’s obligations under the Agreements.

There are however two considerable difficulties with this argument. The first of these difficulties is that this interpretation seems to me to read too much into paragraph 2(5) of the Old Code, and for that matter into paragraph 12(1) of the Code. It seems to me that where paragraph 2(5) refers to a person, for the time being bound by a code right, having the benefit of the terms upon which that code right was granted, it proceeds on the basis that a situation exists where a person is bound by a code right. In other words, Paragraph 2(5) does not create, by statute, a transmission of the burden of the relevant code right. Rather, in a situation where a person is bound by a code right, for whatever reason, that person has the benefit of the terms on which the code right was granted. Paragraph 12(1) of the Code is not in the same terms as paragraph 2(5) of the Old Code but, so far as paragraph 12(1) reflects paragraph 2(5), it seems to me that it is similarly limited, in relation to the transmission of the burden of a code right. In summary, I agree with Mr Holland that the purpose of paragraph 2(5) was to emphasize the primacy of the terms of the relevant code agreement over the terms of the Old Code, save where the Old Code provides otherwise. An example of the Code providing otherwise can be found in paragraph 20(1), which provides that the right of alteration in paragraph 20 can be exercised by the landowner, notwithstanding the terms of any agreement binding the landowner; see my discussion of this point earlier in this decision, in the context of rights of relocation and redevelopment, and see the analysis of Recorder Sharp KC in PG Lewins at paragraphs 27 - 43, in particular at paragraph 33.

The second difficulty is that the assignment of code rights is now dealt with by paragraph 16 of the Code. Paragraph 16(4) of the Code provides as follows:

“(4)

From the time when the assignment of an agreement under Part 2 of this code takes effect, the assignee is bound by the terms of the agreement.”

The operation of paragraph 16(4) of the Code was explained by Nugee LJ in the following terms, in his judgment in the Potting Shed case, at [60]:

“60.

Suppose therefore that B duly assigns its code agreement to C. In order to ensure that C “comes to stand in the shoes of” B, one would expect C to enjoy the same position under the Code that B did. So far as the contractual position is concerned this is indeed the case. It is to be noted that code agreements may take the form of the grant of property rights (either in the form of a lease or an easement), but may take the form of merely contractual arrangements. The Law Commission Report refers to the latter as “wayleaves”: see eg §1.27 fn 30 (“A wayleave is an agreement which does not amount to a property right (that is, it is a licence or permission), in contrast with an easement or a lease”) and §2.16 (“in legal terms a right to keep equipment on land might be conferred by a lease or an easement (both of which are property rights) or a licence (a personal permission, often known in this context as a wayleave, and generally arising as a matter of contract…)”). Under the general law the assignment of a contract is effective to confer the benefit of the contract on an assignee but not normally the burden of the contract. But paragraph 16(4) provides that from the time when the assignment of an agreement under Part 2 takes effect, the assignee is bound by the terms of the agreement. In this way the assignee takes both the benefit and the burden of the agreement.”

So far as I am aware, paragraph 16(4) of the Code has no equivalent in the Old Code. Instead, there was paragraph 2(5) of the Old Code which is succeeded, at least in part, by paragraph 12(1) of the Code, which appears to be directed to the same task as paragraph 2(5) of the Old Code. The obvious point which arises is that if paragraph 2(5) of the Old Code had the effect contended for by Mr Radley-Gardner, there would have been no need for a new provision of the kind to be found in paragraph 16(4) of the Code. There would have been no gap in the transmission of the benefit and burden of code rights in the Old Code, which paragraph 16(4) was required to fill in the Code. If however there was such a gap, the introduction of paragraph 16(4) makes sense.

It is also to be noted that paragraph 16(4) is disapplied in the case of subsisting agreements as defined in the transitional provisions in Schedule 2 to the Digital Economy Act 2017. Paragraph 5(1) of Schedule 2 provides that paragraph 16 of the Code does not apply to subsisting agreements. If however the burden of code rights under the Old Code was capable of assignment by telecommunications operators, paragraph 5(1) of Schedule 2 appears also to be redundant. On this hypothesis there would have been no point in disapplying paragraph 16(4) of the Code because there was no gap in the ability to transmit the benefit and burden of code rights under the Old Code.

Although I do not think that it is necessary to go this far, APW’s counsel also referred me to two Law Commission documents which contain discussions of the meaning and effect of paragraph 2 of the Old Code. The relevant discussions are to be found in the Law Commission Consultation Paper No. 205 (paragraphs 3.32 – 3.39 and 3.89 – 3.91) and the Law Commission Report No. 336 (paragraphs 2.82 – 2.92, 3.4 – 3.8, and 3.21 – 3.23). The point which was made is that there is no suggestion, in any of these discussions, that paragraph 2(5) of the Old Code enabled the burden of code rights under the Old Code to be assigned by one operator to another operator. Indeed, paragraph 3.22 of the Law Commission Report made the following recommendation:

“3.22

The revised Code will need to make specific provisions as regards the assignment of other agreements conferring Code Rights, in order effectively to pass on the burden to the assignee. For example, the Code Operator to whom a wayleave is assigned should be responsible for the payment of rent for the period after the assignment, not the assignor.”

This recommendation is clearly inconsistent with the suggestion that the burden of code rights was fully capable of assignment by an operator under the Old Code.

In summary, it seems to me that there was nothing in the Old Code which enabled the burden of code rights under the Old Code to be assigned by one operator to another operator. This gap has now been filled by paragraph 16(4) of the Code, in the case of agreements which are subject to the Code and are not caught by the transitional provisions in paragraph 5(1) of Schedule 2 to the Digital Economy Act 2017. The gap did however exist when the Agreements were entered into. It follows that I do not accept Mr Radley-Gardner’s argument that paragraph 2(5) of the Old Code had the effect of transmitting the burden of the obligations of an operator under a code agreement to an assignee of the operator. Nor do I accept that paragraph 12(1) of the Code has this effect.

In this context my attention was drawn to the decision of the Judge on further preliminary issues in the References and in three other references. The decision in question, which was referred to by APW’s counsel as “the Second Decision” (I shall use the same expression), is a decision dated 9^th January 2024 (LC-2023-000322, 323, 332, 348 and 365).

In paragraphs 25-28 of the Second Decision, the Judge records an argument of Mr Radley-Gardner, again as counsel for OT, to the effect that paragraph 12(1) of the Code does have the effect of imprinting a code right with the terms on which it was conferred. I take this to be the same argument which was advanced by Mr Radley-Gardner in the Appeal, in relation to both paragraph 12(1) of the Code and paragraph 2(5) of the Old Code. At paragraph 28 of the Second Decision the Judge said this:

“28.

I find the submissions of Mr Radley-Gardner in relation to Paragraph 12(1) to be persuasive and, in the event that I am wrong in my own analysis of Gencomp and Paragraph 33, I adopt his analysis.”

As is apparent from paragraph 28 of the Second Decision, the argument on paragraph 12(1) of the Code was put as an alternative to the principal argument of OT. In this part of the Second Decision the Judge was concerned with the second preliminary issue, which was whether OT could claim to be a party to a code agreement, in circumstances where the relevant agreements (which included the Agreements) were licences and where OT had not been an original party to any of the agreements. The Agreements were, on the basis of the Decision, licences. The other agreement under consideration was agreed by the parties to be a licence. The Judge decided that OT could be treated as a party to a code agreement, in relation to the three agreements, on the basis of the provisions of paragraph 33(1) of the Code. This was sufficient to decide the point, but the Judge did go on to accept the alternative argument of Mr Radley Gardner, that OT was a party to a code agreement, in relation to the three agreements, on the basis that OT was, by virtue of paragraph 12(1) of the Code, subject to the burden of the operator’s obligations in the three agreements.

It follows that the Judge’s acceptance of Mr Radley-Gardner’s alternative argument based on paragraph 12(1) of the Code was strictly obiter to his decision on the second preliminary issue. I was also told that the Second Decision is under appeal. Nevertheless it seems to me, on the basis of my analysis of paragraph 2(5) of the Old Code and paragraph 12(1) of the Code, that the Judge was wrong to accept the alternative argument of Mr Radley-Gardner.

Mr Radley-Gardner also made reference to what he referred as the principle of qualified rights. In the case of each of the Agreements the code rights granted were qualified by reference to the conditions and obligations in each Agreement. I do not follow this argument. At the time when the Agreements were entered into Orange assumed the obligations which it assumed under each Agreement. Thereafter, and if the Agreements took effect as licences, Orange could have assigned the benefit of the Agreements to a third party operator, but would have remained liable under its obligations in the Agreements. I cannot see how the terms of the Agreements could have rendered the third party operator subject to the burden of Orange’s obligations in the Agreements, if this result could not be achieved either by the common law or by statute.

In conclusion, in relation to Mr Radley-Gardner’s third set of arguments on Clause 10.1, I am not able to accept the arguments of Mr Radley-Gardner to the effect that, at the time when the Agreements were entered into, the burden of the obligations assumed by Orange in the Agreements either was or might have been capable of assignment to a third party operator, either by the common law or by statute or by the terms of the Agreements. I am also unable to accept the arguments of Mr Radley-Gardner to the effect that the parties could easily be understood to have thought that the Agreement had this effect. In my view the appropriate assumption to make is that the parties would have been aware of the legal position at the time when they entered into the Agreements; namely that the burden of the obligations of Orange in the Agreements was not capable of assignment to a third party operator, either by the common law or by statute or by the terms of the Agreements.

I indicated that I would come back to Mr Radley-Gardner’s first and second arguments on Clause 10.1.

So far as the first argument is concerned, I have taken the point that the parties to a lease would not normally be expected to have stated in terms that the provisions of the lease would bind successors in title. The fact is however that the parties did choose to include Clause 10.1 in each of the Agreements, in circumstances where, in my view, the parties can be assumed to have understood that the burden of Orange’s obligations under the Agreements was not capable of assignment and to have understood, if the Agreements were intended to be licences, that there would no successors in title, at least on Orange’s side, and (in the case of the 2002 Agreement) no persons deriving title from Orange or from an assignee from Orange of the benefit of the 2002 Agreement. In these circumstances I do not think that Mr Radley-Gardner’s first argument carries any real weight.

Turning to the second argument, it seems to me that the fact that the Agreements were made against the background of the Old Code does not assist OT. My analysis of the Old Code is that it did not fill the gap which I have identified in the transmissibility of the benefit and burden of the obligations in the Agreements. Accordingly, it seems to me that considering Clause 10.1 in the context of the code rights which it engaged points against rather than towards a licence.

Returning to the specific question which I am considering in this part of this decision, where does all this leave Clause 10.1, in terms of its effect on the question of whether the Agreements took effect as leases or licences? Drawing together all of the above analysis, my conclusions are as follows:

Paragraphs 8-10 of the Grounds of Appeal – the absence of deeds

Neither of the Agreements was made by deed. If the Agreements did take effect as leases rather than licences, each of the Agreements needed to be made by deed in order to take effect at law; see Section 52(1) of the Law of Property Act 1925. The exemption in Section 54(2) of the Law of Property Act 1925 would not have been available, given that both Agreements were entered into for terms which exceeded three years. The Judge considered the fact that the Agreements were not made by deed to be a strong indicator that the parties did not intend to create leases; see Paragraph 28.

I can see some merit in this point. If the parties had intended to create leases, it seems reasonable to assume that the parties would have appreciated that deeds were required. I would not go so far as the Judge in describing it as inevitable that the Agreements would have been made by deed if the parties had intended to create leases, but it seems to me that the absence of deeds is an indication against the parties having had the intention to create leases.

As against this, it is important to keep in mind that the fact that the Agreements were made by deed does not prevent the Agreements from taking effect as leases or, in the alternative, giving rise to leases. A lease which is void, because it was not granted by deed, can still take effect in equity, as an agreement for the grant of a lease, provided that the agreement can be enforced by specific performance. Beyond this, if the tenant enters into possession of the premises intended to be demised by a void lease, the tenant becomes a yearly tenant of the premises, upon the terms of the void lease, so far as the same are applicable to and not inconsistent with a yearly tenancy; see Woodfall, Volume 1, at 5.004 and 5.005.

In the present case therefore, the fact that the Agreements were not made by deed does not prevent their taking effect as leases, if they otherwise would have taken effect as leases. For present purposes, and as I have said, the relevant point is that the absence of deeds is an indication against the parties having had the intention to create leases.

I should make it clear, for the avoidance of doubt, that the arguments in the Appeal did not, to any material degree, engage with precisely what kind of lease OT has of each of the Sites, if the Agreements are assumed to have taken effect as leases. Nor does this question appear to have been brought out in the terms of the preliminary issues in the References which were the subject of the Decision. It follows that, in the Appeal and subject to my decision on the Term Issue, I am confining myself to the same question of whether the Agreements took effect as leases or licences. If I conclude that the Judge was wrong, and that the Agreements or either of them took effect as leases, the issue of how these leases or the relevant lease are to be categorised, if it is an issue, will be for separate resolution.

Paragraphs 8-10 of the Grounds of Appeal – the absence of reference to the 1954 Act

At Paragraphs 29 and 30 the Judge made reference to the length of the terms of the Agreements, which he saw as suggestive of leases, and to the absence of any reference to the 1954 Act. The Judge attached considerable importance to the absence of reference to the 1954 Act. As he explained, at Paragraph 30:

“30.

I am satisfied that Orange would have had access to the very best legal advice available at the time the agreements were entered into. It was entering into a long-term commercial contract involving very substantial capital outlay. If it was intended that Orange was to have the benefit of the 1954 Act it would have said so. A licence is not protected under the 1954 [Act]. If Orange were indeed trying “to have their cake and eat it” there would be a real risk that either agreement might be construed as a licence and 1954 Act protection lost. Why would Orange take that risk jeopardising coverage? The site providers should not be left out of consideration either. Surely Messrs Pinkerton and Thornhill would have wanted clarity – would they be able to obtain possession at the end of the term or would they be left with a 1954 Act protected tenant? There are considerable risks of “unintended consequences” for both parties. The complete absence of any reference to the 1954 Act or indeed to any contracting out, points strongly to the intention of the parties to enter into an agreement for installation of telecommunications equipment rather than a lease subject to the 1954 Act. Orange would, of course, have been well aware of its rights to apply under paras. 5 and 21 of the Old Code on expiry of the term.”

I do not agree with this reasoning. A business lease has the protection of the 1954 Act, assuming that it is not contracted out of this protection and assuming that it does not, for some other reason fail to qualify for such protection, whether the lease has a statement to this effect or not. As a general rule parties do not record in a business lease that the lease is subject to the protection of the 1954 Act. The 1954 Act simply applies to the business lease, unless excluded for some reason.

It seems to me that the absence of reference to the 1954 Act in the Agreements is a neutral factor. It does not point in the direction of a lease or a licence.

As it happens there is a reference to the 1954 Act in Clause 7.4 of the 2002 Agreement. I have already made reference to Clause 7.4, which permitted Orange to share the use of the Lubbards Site with third parties. Reference is made in Clause 7.4 to Section 42 of the 1954 Act for the purposes of identifying group companies which were outside the scope of this right to share the use of the Lubbards Site. Given this purpose it seems to me that this reference to the 1954 Act is also neutral, in terms of the question of whether the Agreements took effect as leases or licences.

Paragraphs 8-10 of the Grounds of Appeal – other provisions of the Agreements

The Judge in the Decision and counsel in their submissions made reference to various other provisions of the Agreements. I do not regard any of these other provisions as pointing, particularly, either towards a lease or a licence. I will however deal briefly with these other provisions for the sake of completeness.

There is no clause providing for Orange’s quiet enjoyment of the respective Sites in either Agreement. I agree with the Judge (Paragraph 44) that this is a neutral factor. If the Agreements did take effect as leases, a covenant for quiet enjoyment would be implied.

Each of the Agreements contains provisions relating to the upkeep of, respectively, the PCN Equipment and the Telecommunications Equipment. There is no general obligation to keep either of the Sites in repair. I agree with the Judge (Paragraphs 52 and 53) that none of this is significant. The Sites themselves were and are sites located in open land, on which is located only the telecommunications equipment. There is nothing to repair or maintain save for the telecommunications equipment itself. The obligations in the Agreements to maintain the telecommunications equipment seem to me to be equally consistent with the Agreements being leases or licences.

The Agreements contain warranties of title on the part of the Owner, in Clause 6.1 of each of the Agreements. I agree with the Judge (Paragraph 48) that these warranties are not significant. It seems to me that they are equally consistent with the Agreements being leases or licences.

Each of the Agreements contains a provision requiring Orange to maintain public liability insurance in respect of the Sites. The need for this is obvious, given the nature of the equipment on the Sites and the use of the Sites. I agree with the Judge (Paragraph 59) that these provisions do not point towards either Agreement being a lease. These provisions seem to me to be a neutral factor.

Each Agreement contains, at Clause 9.1, a provision giving the Owner the right to terminate the Agreement in the event of breach of the Agreement on the part of Orange. At Paragraph 61 the Judge rejected the argument of Mr Holland that Clause 9.1 of each Agreement was a forfeiture clause in all but name. The Judge took the view that the termination by written notice provided for by Clause 9.1 was “wholly different from a landlord’s right of re-entry under lease”. In my view Clause 9.1 is neutral. It can be characterised as a forfeiture clause, although I would agree with the Judge that it is not framed in the usual terms of a forfeiture clause in a lease. Equally it can be characterised as a right of termination applicable to a licence. I do not see Clause 9.1 as being inconsistent with the Agreements being leases. I do not see Clause 9.1 as being inconsistent with the Agreements being licences.

There is an obligation on the part of Orange, in each of the Agreements, to pay any rates levied by reason of Orange’s use of the telecommunications equipment on each of the Sites. I agree with the Judge (Paragraph 63) that this is a neutral factor.

Paragraphs 8-10 of the Grounds of Appeal – the 2000 Supplemental Agreement

Paragraphs 9 and 10 of the Grounds of Appeal concentrate upon the 2000 Supplemental Agreement. I do not regard it as necessary to deal in detail with these grounds of appeal, for two reasons.

First, it seems to me that the real significance of the 2000 Supplemental Agreement lies in the plans annexed thereto; that is to say the 2000 Sandbach Plans. It seems to me that the 2000 Sandbach Plans contain a good deal of evidence which, for the reasons which I have already explained, (i) throws light on the content of the missing 1997 Sandbach Plan, (ii) is relevant to understanding the nature of the Sandbach Site when the 1997 Agreement was originally made, and (iii) is relevant to the question of whether the 1997 Agreement took effect as a lease or a licence. I do not need to repeat my earlier analysis of the 2000 Sandbach Plans and their relevance in the Appeal. Beyond this, I do not regard the 2000 Supplemental Agreement as having much relevance to the lease/licence question, principally because the 2000 Supplemental Agreement, with the exception of the enlargement of the Sandbach Site, made only minor variations to the 1997 Agreement. I also continue to bear in mind Mr Radley-Gardner’s point that, as a general rule, the conduct of parties subsequent to the making of an agreement is not admissible as an aid to the construction of that agreement.

Second, it is contended in paragraph 10 of the Grounds of Appeal that if the 1997 Agreement took effect as a licence in relation to the Sandbach Site, the 2000 Supplemental Agreement was effective to grant a lease of the Sandbach Site, as enlarged by the 2000 Supplemental Agreement. I find it difficult to see how the 2000 Supplemental Agreement could have created a lease of the Sandbach Site, as enlarged, if the 1997 Agreement took effect as a licence. In particular, if the obstacle to the 1997 Agreement having taken effect as a lease was that it was not entered into for a term certain (the question which I have yet to decide), I cannot see that the 2000 Supplemental Agreement did anything to remove that obstacle.

Putting the Term Issue to one side, the correct analysis seems to me to be as follows. If the 1997 Agreement took effect as a licence, it seems to me that the 2000 Supplemental Agreement did no more than vary that licence and enlarge the premises (the Sandbach Site) in respect of which the licence existed. I cannot see a basis, on this hypothesis, why the 2000 Supplemental Agreement would have taken effect as a lease if the 1997 Agreement only took effect as a licence. If, by contrast the 1997 Agreement took effect as a lease, then it seems to me that the 2000 Supplemental Agreement, by reason of the fact that it enlarged the premises (the Sandbach Site) demised by that lease, would have worked a surrender by operation of law of the lease created by the 1997 Agreement and the regrant of that lease on the terms of the 1997 Agreement as varied by the 2000 Supplemental Agreement. I do not think that the need for such a surrender by operation of law and regrant, on the hypothesis that the 1997 Agreement took effect as a lease, is a matter which counts against the argument that the 1997 Agreement took effect as a lease. Equally, I do not think that APW can fall back on the 2000 Supplemental Agreement, if the 1997 Agreement did not take effect as a lease.

Paragraphs 8-10 of the Grounds of Appeal – the overall analysis

I now come to my overall analysis of the position, in relation to the question of whether the Judge was right to decide, for the reasons which he gave, that each of the Agreements took effect as a licence rather than as a lease. For this purpose I consider the provisions of each of the Agreements as a whole. In the case of the 1997 Agreement I should repeat the point, for the avoidance of any doubt, that this overall analysis is subject to my decision on the Term Issue.

The Judge set out his final reasoning and conclusion in Paragraphs 80 and 81. I have already quoted these Paragraphs, but I repeat them for ease of reference:

“80.

My decision is finely balanced. There are clearly clauses to be found in “Terms and Conditions” attached and incorporated into the 1997 Agreement and contained in Schedule 1 to the 2002 Agreement which are resonant of a lease. However, those terms and conditions are, in my judgment, outweighed by clause B to both Agreements. The intention of the parties was that the operator would be granted a bundle of rights in connection with the installation and operation of PCN/Telecommunications Equipment. There is no grant of exclusive possession with a corresponding interest in land. The “lift and shift” provisions provide a qualified right for the site owner, in consultation with Orange, to more the Site to another location within the Premises (of which the Site forms a part). The Plans attached to the agreement do not demarcate the site. The Plans are in fact technical drawings of the PCN/Telecommunications Equipment. The quite extraordinary fencing and the almost “Orwellian” security observed by Mr Powell are not intended to demarcate the site or keep the landlord out. Fencing and security is present to protect the PCN/Telecommunications Equipment in both the 1997 and 2002 Agreements. The Site is secondary.

81.

I find that neither the 1997 nor the 2002 Agreement grant exclusive possession. That does not mean that they grant purely personal contractual rights either. Both are telecommunications agreements. Such agreements are not leases to which Part 2 of the Landlord and Tenant Act 1954 applies.”

Standing back and carrying out my own overall review of the position, I find myself in respectful disagreement with the Judge’s analysis. I do not see the position as finely balanced. It seems to me to be clear, on an overall analysis, that the 2002 Agreement took effect as a lease rather than as a licence, and that the 1997 Agreement would have taken effect as a lease rather than a licence, on the assumption that it was entered into for a term certain; in other words subject to the Term Issue.

I say this for the following reasons, which I can state relatively briefly, given that the underlying reasoning has already been stated in my analysis of individual provisions and sets of provisions in each Agreement. These reasons fall into two parts. I should add that although it is necessary to consider the Agreements separately, and although I accept Mr Radley-Gardner’s point that one Agreement cannot be used as an aid to the construction of the other, my reasons are common to both Agreements because they rely on identical or similar provisions in each Agreement.

First, there are the provisions of each Agreement, including the plans attached to the Agreements, which I have considered in sections (ii) – (vi) of my analysis of paragraphs 8-10 of the Grounds of Appeal. I have summarised, earlier in this decision, the correct approach to the determination of the question of whether an agreement for the occupation and/or use of land constitutes a lease or a licence. I have also summarised the legal principles which govern the concept of exclusive possession. Applying this approach and these legal principles it seems to me that each Agreement did have the effect of granting to Orange exclusive possession of the relevant Site. As I have already noted, Clause B of each Agreement granted to Orange a bundle of rights in respect of a defined area of land; namely the relevant Site. The relevant Site was intended to be enclosed and was enclosed, with Orange being responsible for that enclosure. The relevant Site was to be occupied and was occupied solely by Orange’s telecommunications equipment, which remained the property of Orange. In the case of each Site, Orange was granted what were effectively exclusive rights of use, which Orange could share with other occupiers, if it so chose. The Owner did not have any such rights, and the Owner’s rights to come on to the Site were substantially restricted. Putting all of this together, it seems to me, in the case each Agreement, that there was a grant of exclusive possession of the relevant Site to Orange.

The provisions for relocation of the telecommunications equipment which can be found in each Agreement have given me pause for thought, in reaching this conclusion. In this context I repeat my earlier analysis of the relocation and redevelopment provisions in each Agreement. For the reasons which I have set out in my earlier analysis, I do not consider that these provisions are sufficient to undermine or contradict my conclusion that each Agreement did grant exclusive possession of the relevant Site to Orange.

Second, there is Clause 10.1 of each Agreement. Again, I repeat my earlier analysis of Clause 10.1. For the reasons which I have set out in my earlier analysis, it seems to me that Clause 10.1 is inconsistent with either of the Agreements having taken effect as a licence. Clause 10.1 seems to me to point strongly to each Agreement being intended to take effect as a lease.

The remainder of the provisions of the Agreements, with the exception of Clause 2.1 of the 1997 Agreement which I have yet to consider in relation to the Term Issue, seem to me to be neutral, in terms of whether the Agreements took effect as leases or licences.

In Paragraph 80 the Judge concluded that neither of the Agreements granted exclusive possession of the relevant Site. In reaching this conclusion the Judge principally relied upon Clause B, the plans attached to the Agreements and what the Judge referred to as the lift and shift provisions; being the provisions I have referred to as the rights of relocation and redevelopment. The Judge also reasoned that the enclosure and security of the Sites was attributable to the need to protect the telecommunications equipment on the Sites, and was not intended to demarcate the Sites or keep the Owner out. I have analysed the relevant provisions of the Agreements and the plans attached to the Agreements in a different way to the Judge. I also disagree with the Judge that any of the matters which I have relied upon, in order to reach the conclusion that each of the Agreements did make an effective grant of exclusive possession of the relevant Site to Orange, can be disregarded on the basis that the intention was to protect the telecommunications equipment. Applying the legal principles which I have summarised earlier in this decision, it seems to me that what matters is the actual effect of the relevant provisions in each Agreement. The actual effect of the relevant provisions, in my judgment, was that Orange was granted exclusive possession of each Site. The intention may have been to protect the telecommunications equipment, but the effect was a grant of exclusive possession.

Paragraphs 8-10 of the Grounds of Appeal – the outcome of the overall analysis

The result of the differences between my own analysis and the analysis of the Judge is, as I have said, that I find myself in respectful disagreement with the Judge.

I therefore conclude that the Judge was wrong to decide that the 2002 Agreement took effect as a licence rather than a lease. It is not in dispute that the 2002 Agreement was entered into for a term certain, at the equivalent of a rent. On the basis of my analysis, the 2002 Agreement was also effective to grant Orange exclusive possession of the Lubbards Site. In my judgment, and for the reasons which I have given, the correct conclusion is that the 2002 Agreement took effect as a lease.

The same conclusion does not necessarily follow in the case of the 1997 Agreement. The Judge was not necessarily wrong in his actual decision that the 1997 Agreement took effect as a licence. In the case of the 1997 Agreement, and notwithstanding my decision on the question of exclusive possession, there remains the Term Issue, to which I now turn.