[2024] UKUT 51 (LC)

Because the Site Lease is a Code agreement, it is subject to the provisions of paragraph 30 of the Code, which says this:

“30 Continuation of code rights

(1)

Sub-paragraph (2) applies if—

(a)

a code right is conferred by, or is otherwise binding on, a person (the “site provider”) as the result of a code agreement, and

(b)

under the terms of the agreement—

(i)

the right ceases to be exercisable or the site provider ceases to be bound by it, or

(ii)

the site provider may bring the code agreement to an end so far as it relates to that right.

(2)

Where this sub-paragraph applies the code agreement continues so that—

(a)

the operator may continue to exercise that right, and

(b)

the site provider continues to be bound by the right.

(3)

Sub-paragraph (2) does not apply to a code right which is conferred by, or is otherwise binding on, a person by virtue of an order under paragraph 26 (interim code rights) or 27 (temporary code rights).”

The effect of paragraph 30 is to give the Code operator a form of security of tenure, because it ensures that the Code agreement continues when it would otherwise have expired by effluxion of time (sub-paragraph (1)(b)(i)), or where a break notice or a notice to quit has been served under the terms of the lease (sub-paragraph (1)(b)(ii)).

Therefore any attempt to bring the Site Lease to an end by the service of a notice pursuant to clause 5.8 of the lease is of no effect.

Had the Site Lease not been a Code agreement then it would have been crucial to determine whether the notice purportedly served pursuant to clause 5.8(b)(v) of the lease was valid, so that the parties would know whether the appellant’s leasehold interest in the Kenton Road exchange had been brought to an end – although of course this Tribunal would have had no jurisdiction to make such a determination.

As it is, whether or not a valid notice has been served the Code agreement continues. It can only be brought to an end if the respondent has not only served a valid notice under paragraph 31 of the Code but can also establish one or more of the conditions set out in that paragraph under which the Tribunal may make an order bringing the Site Lease to an end so far as the Kenton Road Exchange is concerned.

Accordingly we have to move to issue 3: was the paragraph 31 notice valid? The question that the FTT directed should be decided as issue 2, namely the validity of the break notice, is within the Tribunal’s jurisdiction only insofar as it is relevant to issue 3.