[2024] UKUT 51 (LC)

Fecha: 23-Feb-2024

Background (2): the early termination provisions in the OT Leases

Background (2): the early termination provisions in the OT Leases

14.

The early termination provisions are contained in clause 5.8 of the OT Lease. Here are the relevant parts of that clause, with the punctuation (or lack of it) and emphasis as in the original:

5.8

Determination

(a)

(i) If the Landlord shall desire to determine the Term at any time in respect of the whole of any one or more of the Premises … in circumstances where a Landlord's Termination Right (as defined in clause 5.8(b)) applies and shall give to the Tenant the requisite prior written notice detailed in sub-clause 5.8(a)(ii) below then immediately on the date specified in such notice the present demise and everything herein contained insofar as it relates to such Premises specified in such notice shall cease and be void but without prejudice to the rights and remedies of any party against the others in respect of any antecedent claim or breach of covenant

(ii)

the notice referred in in sub-clause 5.8(a)(i) shall be (1) in relation to a Landlord's Termination Right detailed in sub-clauses 5.8(b)(i)-(iv) (inclusive), not less than 12 months and (2) in relation to a Landlord's Termination Right detailed in sub-clause 5.8(b)(v), not less than 1 month more than the requisite termination period detailed in the relevant Landlord's Existing Licensee Contract

(b)

For the purposes of this clause 5.8 only the following words shall have the following meanings:

"Alter" means to carry out any works of redevelopment, refurbishment, demolition, alteration or addition affecting the whole or any part of any one or more of the Premises and whether or not involving a direct or indirect Disposal of all or any part of the property the subject of such activities and whether or not such activities are carried out by the Landlord or a third party and "Alteration" and "Altered" shall be construed accordingly;

"Dispose" means to sell, lease, assign, transfer, declare trust or otherwise dispose (or to agree to do any of the foregoing) and "Disposal" and "Disponee" shall be construed accordingly;

"Landlord's Termination Right" means where:

(i)

the Landlord Disposes to a third party the Landlord's interest in all or any part of the Site; and/or

(ii)

Alteration to all or any part of the Site is proposed where the carrying out of such Alteration and/or subsequent use of the Site as Altered would be impeded by the use of the Premises for the Permitted Use; and/or

(iii)

the Landlord must comply with any statutory or regulatory requirements, including without limitation health and safety requirements, applicable to all or any part of the Site the compliance with which will (in the reasonable opinion of the Landlord) necessitate the cessation of all or materially all Wireless Telegraphy uses from the Premises for a period of at least 12 months; and/or

(iv)

the Landlord ceases physically to maintain in whole or any material part of all or any part of the Site of which the relevant Premises forms part where such cessation is effected by reference to principles of prudent estate and/or financial management; and

(v)

the Landlord wishes to terminate to Lease for any reason other than the

reasons set out in sub-clauses 5.8 (b)(i) to (iv) (inclusive)

(c)

Provided that if the Landlord shall exercise the rights in clause 5.8(a) on the basis of:

(i)

paragraph (i) of the definition of Landlord's Termination Rights, the Landlord shall make reasonable enquiries of the person to whom any relevant Disposal is to be made to confirm whether or not such person is a direct competitor of the Tenant (being On Tower UK Limited) in relation to its business as a provider and maintainer of facilities for stations for Wireless Telegraphy in accordance with the Permitted Use ("Direct Competitor") and following such enquiries the Landlord shall not knowingly effect the relevant Disposal as part of and contemporaneously with a Disposal of at least 50% of all Sites (as defined in the Master Site Agreement) ("Portfolio Disposal") and in favour of such Direct Competitor otherwise than subject to all Leases affecting the Sites in question during the period expiring 15 November 2025 provided that nothing in this clause shall prevent the Landlord from effecting any such Portfolio Disposal in favour of an Associated Company of the Landlord where such Associated Company shall itself agree to be bound by the provisions of this clause 5.8(c)(i)(B);

(ii)

paragraph (ii) of the definition of the Landlord's Termination Rights, such impediment must in the Landlord's reasonable opinion be one which is likely to remain for at least 12 months and must not be one which in the Landlord's reasonable opinion can be avoided or mitigated by any reasonable work-around proposals put forward by the Tenant (the Tenant being afforded a period of 10 Business Days to make such proposals for this purpose);

(iii)

paragraph (iv) of the definition of Landlord's Termination Rights:

(A)

the Landlord shall offer to the Tenant within 20 Business Days of any decision by the Landlord to cease physically to maintain the right to undertake at the Tenant's own cost expense and liability (subject to such other reasonable terms and conditions as the Landlord may stipulate) such physical maintenance and the Landlord shall consider in good faith (but without further obligation) any proposal by the Tenant made in response to such offer; or

(B)

(where the Landlord shall be proposing to sell the whole of the Site) the Landlord shall first (on a non-binding subject to contract basis) by notice in writing afford the Tenant the opportunity to make an offer to buy the Landlord's interest in the Site such offer (if made) to be made within 20 Business Days of the Landlord's notice aforesaid (the Landlord being under no obligation to accept the same);

(d)

the Landlord shall not be obliged to pay any compensation or disturbance fees to the Tenant if the Landlord exercises a Landlord's Termination Right”

15.

So there are five circumstances in which, or grounds on which, the landlord can terminate. Those labelled (i) to (iv) are specific, while the general right labelled (v) is available only if none of the others is available; so if the landlord has contracted to sell the relevant site it can use ground (i) and not ground (v). The notice period for grounds (i) to (iv) is 12 months, whereas the notice period under ground (v) depends upon the notice to be given in other licence agreements (about which the Tribunal has, and needs, no information). Where grounds (i), (ii) or (iv) are relied upon, specific additional requirements are imposed.