LC-2023-000734 - [2025] UKUT 00058 (LC)

Is CTIL the occupier of the Vodafone Site for the purposes of Parts 2 and 4 of the Code?

For ease of reference, we repeat the terms of Paragraph 21:

“(1)

Subject to sub-paragraph (5) and paragraph 27ZA, the court may make an order under paragraph 20 if (and only if) the court thinks that both of the following conditions are met.

(2)

The first condition is that the prejudice caused to the relevant person by the order is capable of being adequately compensated by money.

(3)

The second condition is that the public benefit likely to result from the making of the order outweighs the prejudice to the relevant person.

(4)

In deciding whether the second condition is met, the court must have regard to the public interest in access to a choice of high quality electronic communications services.

(5)

The court may not make an order under paragraph 20 if it thinks that the relevant person intends to redevelop all or part of the land to which the code right would relate, or any neighbouring land, and could not reasonably do so if the order were made.”

As can be seen, Paragraph 21 is tied to Paragraph 20, pursuant to which an operator may apply to the court for an order imposing on the operator and the relevant person an agreement which confers a code right on the operator and provides for the code right to bind the relevant person. Indeed, it is in the Renewal Proceedings that Vodafone seeks a renewal of the 2003 Agreement pursuant to Paragraph 33 and, so far as necessary, Paragraph 20. Sub-paragraphs (2) and (3) of Paragraph 21 set out the two conditions (“the Conditions”) which must be satisfied before an order can be made under Paragraph 20. We will refer to the condition in sub-paragraph (2) as “the First Condition”, and to the condition in sub-paragraph (3) as “the Second Condition”.

Paragraph (d) thus imports into Paragraph 31 the test which would have to be met for the imposition of a code agreement on an application under Paragraph 20. Effectively, one is asking the hypothetical question of whether the court could make an order under Paragraph 20, by reference to the test stated in Paragraph 21, in a case where Paragraph (d) is relied upon.

One consequence of this is that, where Paragraph (d) is relied upon, one has to consider whether the court could not make an order under Paragraph 21 by reason of Paragraph 21(5). In the present case it seems to us that, by reason of our decision on Preliminary Issue (c), the disqualification in Paragraph 21(5) is not engaged.

The preliminary point taken by the Respondents on Paragraph 21 is that Vodafone could not seek new code rights against Icon because CTIL is in occupation of the Vodafone Site. The basis for the argument is Paragraph 9(1), which provides that a code right in respect of land may only be conferred on an operator by an agreement between the occupier of the land and the operator.

In Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd (referred to earlier in this decision) the Supreme Court decided that, in order for the regime under the Code to work as it should, it was not necessary to construe the Code as preventing the operator from obtaining additional code rights in respect of the land. Effectively, the occupation by the operator of the relevant site could be ignored, on the basis that the operator was not intended to be the same person as the occupier of the land referred to in Paragraph 9(1). It was not however necessary to ignore the occupation of anyone else, including a different operator in occupation of the relevant site. In the first of the three cases before the Supreme Court in Compton Beauchamp this meant that CTIL, which was seeking new code rights pursuant to Paragraph 20, was not able to seek those code rights against Compton Beauchamp Estates Ltd, the landowner, because the party in occupation of the site was, as the Tribunal had determined at first instance, Vodafone rather than Compton Beauchamp Estates Ltd; see the judgment of Lady Rose JSC at [162]-[164].

As we understood this part of the Respondents’ argument, it works in the following way. If CTIL is the occupier of the Vodafone Site, an order under Paragraph 20 could not be sought by Vodafone against Icon, and could not be made by the Tribunal. As such, the Conditions cannot be met in the present case, because there is no order which could be made under Paragraph 20 against Icon. Putting the matter another way, the Conditions cannot operate in a case where the relevant order, which is the basis of each Condition, could not be made against the site provider seeking to rely upon Paragraph (d).

The Respondents’ preliminary point raises at least one interesting question. The question to be asked in relation to Paragraph 21, where Paragraph (d) is relied upon, is a hypothetical one. As such, the question may be said to require the assumption that an agreement is to be imposed upon the site provider, as referred to in Paragraph (d), regardless of whether such an agreement could in fact be imposed upon that site provider pursuant to Paragraph 20.

It is not however necessary for us to decide this or any other such interesting questions, because the preliminary point depends upon the proposition that CTIL is in occupation of the Vodafone Site in its own right. The Respondents accept that occupation may be vicarious, that is to say through an agent, but their argument is that CTIL occupies the Vodafone Site not as agent of Vodafone but in its own right for the purposes of its own business, with Vodafone and Telefonica as its customers. We have however already rejected this argument, for the reasons which we have set out at length in our analysis and determination of Preliminary Issue (a). We have concluded, both by reference to the relevant agreements and by reference to the remainder of the evidence, that CTIL has remained as the agent of Vodafone in relation to the Vodafone Site and the Passive Assets thereon, and has not been operating any independent business of its own on the Vodafone Site, either in relation to Vodafone or Telefonica. We have rejected the argument that CTIL is or has been in occupation of the Vodafone Site, providing services to Vodafone and Telefonica as its customers. In these circumstances it seems to us that the preliminary point cannot get off the ground. For all the reasons set out earlier in this decision, we do not consider that CTIL is the occupier of the Vodafone Site, within the meaning of Paragraph 9(1).

We therefore conclude that CTIL is not the occupier of the Vodafone Site, for the purposes of Part 2 and Part 4 of the Code, with the consequence that the Respondents’ preliminary point on Paragraph (d) fails.

If so, is Vodafone unable to satisfy the public benefit test in Paragraph 21 because it could not seek a code agreement in respect of the Vodafone Site against Icon, but only against CTIL?

By reason of our answer to the previous question, it is not necessary for us to answer this question, or the issues (one of which we have identified above) to which it may give rise.

Is the First Condition met?

So far as the First Condition is concerned, the starting point is to identify the prejudice which, so it is alleged, would be caused to Icon, assuming the making of an order under Paragraph 20. We will adopt the expression used by the Respondents’ counsel, namely “the Notional Order”, to refer to the order under Paragraph 20 which it is necessary to assume for the purposes of deciding whether the Conditions are met. For the avoidance of doubt, the Notional Order would be an order imposing upon Vodafone and Icon a new code agreement pursuant to Paragraph 20.

As the Respondents’ case was stated in closing submissions, Icon alleges that it would suffer the following prejudice as a result of the making of the Notional Order, which is also said not to be capable of being adequately compensated by money:

Vodafone's list of issues for the Trial included, at paragraph 12, the issue of whether Icon was "permitted to assert that any prejudice to it is not capable of being adequately compensated by money (para 21(2) of the Code), given its statement of case".  As we have explained, the parties were not able to agree a list of issues for the Trial, with the exception of the planning issues.  As we understood the position this particular argument, which is absent from the Respondents' list of issues, was not pursued by Vodafone in closing submissions.  If however we have misunderstood the position we should say, for the sake of completeness, that we have considered Icon's statement of case in the Termination Proceedings and, in particular, that part of the statement of case which pleads Icon's case on Paragraph (d).  In our view, and if this did remain in issue at the Trial,  Icon's case was sufficiently pleaded for the Respondents to be entitled to argue that the prejudice which they allege, for the purposes of Paragraph 21(2), is not capable of being adequately compensated by money.

In terms of the correct approach to the question of whether prejudice can adequately be compensated by money, we were helpfully referred to a number of cases which contain guidance on that approach. In Evans v Marshall v Bertola [1973] 1 WLR 349 Sachs LJ identified the relevant question in the following terms, at 379H:

“The standard question in relation to the grant of an injunction, " Are damages an adequate remedy? ", might perhaps, in the light of the authorities of recent years, be rewritten: " Is it just, in all the circumstances, that a plaintiff should be confined to his remedy in damages? "

We accept that difficulties in the quantification of damages are often a factor in identifying the adequacy of damages as a remedy. In this context, the Respondents’ counsel referred us to a statement of AL Smith LJ in his judgment in Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287. In considering the position of the plaintiff in that case who, in the absence of an injunction, would be saddled with a lease with an unexpired term of 19 years and a continuing nuisance from the activities of the defendants, AL Smith LJ said this:

“Moreover, how are these injuries to be put into money, and upon what principle are these damages to be assessed so as to represent the continuing injury to the Plaintiff? To guess at them is not assessing them at all.”

It is important to note that this statement was made in the context of AL Smith LJ considering the question of whether the injury to the plaintiff’s rights was a small one. The judge went on to note that, in order to constitute a real assessment in that case, it would have been necessary to proceed on the basis of a buy out of the plaintiff’s interest in his lease, which was not an approach sanctioned by the court at the instance of the tortfeasor. In these circumstances we are not sure that the statement referred to by the Respondents’ counsel is directly on point but, as we have said, we accept that difficulties in quantification are often a factor in considering the adequacy of damages as a remedy. We also accept that loss of profits from business activity, particularly in the context of competitive businesses, is an area where the difficulty of assessing damages may have the consequence that prejudice is not capable of being compensated by money; see Sunrise Brokers LLP v Rodgers [2014] EWCA Civ 1373 [2015] ICR 272, at [53] and, in the context of telecommunications, Software Cellular Network Ltd v T-Mobile UK Ltd [2007] EWHC 1790 (Ch), at [32]-[36].

Also helpful on this question is the decision of the Tribunal in Cornerstone Telecommunications Infrastructure Limited v University of the Arts of London [2020] UKUT 248 (LC). In this case the Tribunal were concerned with CTIL’s application under Paragraph 20 for rights to install and operate ECA on the roof of the respondent’s building at Elephant and Castle. This created problems for the respondent, the University of Arts because, simplifying what were more complex contractual arrangements, it had entered into contractual arrangements with a developer which meant that, for commercial reasons, it needed to be able to deliver vacant possession of the relevant building to the developer at a certain point. As such, the University argued that the Conditions were not met. In particular, the University argued that it would suffer prejudice, not capable of being adequately compensated in money, if the code agreement was imposed, because it would no longer be in control of its ability to meet its contractual obligations to the developer and, in particular, to meet the commercial requirement to give vacant possession of the building to the developer at a certain point. If the code agreement was imposed, the University would have to resort to proceedings under Part 5 of the Code at the relevant time, which might or might not be successful. The Tribunal summarised the position in the following terms, at [34] and [36]:

“34.

So the imposition of an agreement under paragraph 20 would mean that the respondent was no longer in control of its ability to give vacant possession of the LCC building to the developer within 18 months of the commencement of the lease-back and might well be unable to do so. The risk of litigation, and the time that litigation would take, put it at risk of having to pay rent beyond the first 18 months of the lease; and if the litigation is unsuccessful then at worst it will be unable to deliver vacant possession at the end of the three-year lease. That will leave it liable either to an unpredictable level of damages to the developer (which it would seek to recover from the claimant) or to an order for specific performance or an injunction. The consequences of litigation with the developer are unpredictable and unquantifiable in terms of reputational damage and damage to the working relationship with the developer. The respondent will also be prejudiced if entry into the new building is delayed, because students will have to continue working in an unsatisfactory environment.”

“36.

In summary the respondent says, first, that a number of these prejudices are not capable of being quantified in money – in particular the risk to reputation, the risk to its relationship with its students, and the risk of a claim for an injunction. Accordingly the condition in paragraph 21(2) is not met. Nor, secondly, is the condition in paragraph 21(3) because the level of prejudice is so very high (as well as being unquantifiable at present) that it cannot be said that the public benefit likely to result from the making of the order outweighs the prejudice to it, even bearing in mind the public interest in a choice of high quality electronic communications networks.”

In their conclusions on the Paragraph 21 issue the Tribunal first provided, at [51]-[52], some useful guidance on the correct approach to both of the Conditions:

“51.

It is clear that Parliament in enacting the Code intended private landowners to participate in the provision of telecommunications sites for the public good by suffering the use of their land for that purpose, being compensated for any damage caused but for consideration calculated on a basis that prevents them from making a profit out of the deal as they could under the Code’s statutory predecessor. The test for the imposition of such rights is quite a stiff one; for the respondent to escape this public duty, unless it is itself going to redevelop the site, it must show either that it will suffer loss that cannot be compensated in money, or that the prejudice it will suffer is so great that it outweighs the public benefit derived from the use of the site. The level of prejudice must be very high indeed to outweigh the public benefit, in the light of the public demand for, and dependence upon, the availability of electronic communications. The benefit is perhaps even higher today than it was when the Code was enacted and certainly in the current circumstances we are all keenly aware of it.

52.

But the very fact that Parliament provided, in paragraph 21(2), a way out for the landowner who will suffer prejudice that cannot be compensated, or in paragraph 21(3) contemplated a level of prejudice so great that it would outweigh the public benefit, points to the fact that Parliament did not intend a landowner to comply with this public duty at all costs. There comes a point when it is too much to ask.”

What particularly concerned the Tribunal on the facts of the case, was the element of risk confronting the respondent and, in particular, the risk of litigation; see [53]. The Tribunal decided, for this reason, that the First Condition was not met. The Tribunal expressed their conclusions in the following terms, at [56]-[57]:

“56.

The consequence of risk is stress; the risk of litigation will cause stress and uncertainty to the respondent’s employees, at a time when they are preparing for a move of the entire institution to a new building (itself a stressful process). If litigation becomes a reality there will be further stress, with its associated operational consequences. Whether or not the respondent is the successful party in any litigation there will be reputational damage in terms of how the respondent is regarded by the public, and difficulties in its relationship with the developer and with its students and prospective students. We regard all these as prejudices that cannot be compensated in money.

57.

There is a further risk, albeit a lower risk, that the respondent will be unsuccessful in that litigation and will be unable to meet its obligations to the developer. Injunction proceedings might then be taken against it. Again this involves prejudice, in terms of stress, damage to the relationship with the developer, and reputational damage, that cannot be compensated in money.”

In the present case it seems to us that there are two difficulties with the Respondents’ case.

The first difficulty is that the prejudice to Icon relied upon by the Respondents seems to us to be materially overstated. Applying our findings on the planning issues, Icon is subject to a planning condition (or requirement) which requires the removal of the Masts, in circumstances where, at least as matters stand, it is unable to achieve that result. The risk of the LPA taking enforcement action is a high one. Effectively, and as the Respondents submitted in their closing submissions, Icon is currently unable to make lawful use of the New Tower. If the Notional Order was to be made, Icon’s ability to solve this planning problem, at least so far as the Vodafone Site is concerned, by bringing the 2003 Agreement to an end and removing Vodafone and Telefonica from the Vodafone Site, would be gone. Effectively therefore, and on a worst case scenario, Icon is looking at the loss of its investment in the Orange Site, so far as that investment can be demonstrated to have been the investment of Icon.

There is also the risk of enforcement action, in itself. It is not however clear to us what prejudice is thereby constituted. We have accepted that the risk of enforcement is a high one. In these circumstances it seems to us that this translates not into the prospect of a long and expensive planning battle with the LPA but rather, and as the Respondents have been at pains to stress throughout the Trial, to a planning situation where Icon cannot make lawful use of the New Tower.

So far as the alleged reputational loss from the failure of the investment in the Orange Site is concerned, we do not accept that there is any loss of this kind. If one assumes a worst case scenario where the investment in the Orange Site is lost, there is no evidence before us to support the case that this will result in reputational loss to Icon, as opposed to financial loss. Nor do we accept that any such reputational loss will occur. This will simply be a failed investment and a failed scheme. There is, in our view, a stark contrast between the present case and the University of Arts case. As the Tribunal found in that case, the University was looking at very serious problems if it was to have a code agreement imposed upon it; see in particular the decision at [56] and [57], as quoted above. The University faced the risk of uncertain litigation, damage to its reputation in the eyes of the public, problems in its relationship with the developer, and problems with the accommodation of its students and prospective students. The contrast with the present case, where all that is involved is the loss of a commercial investment, seems to us be very clear.

So far as the alleged wider public disbenefits are concerned, they do not seem to us to be relevant in relation to the First Condition, where we are concerned with prejudice caused to the relevant person, namely Icon. If however we are wrong in taking this view, we do not accept that these wider public disbenefits exist. As matters stand there are two masts (the Masts) located in the Field both of which are functioning perfectly adequately. There is no evidence before us that there is, or is likely to be any difficulty with the operation of the Vodafone Mast or the MBNL Mast. There is no evidence before us that the greater capacity offered by the New Tower is currently required by any of the operators on the Vodafone Site or the MBNL Site. We have found that the reality is that Vodafone would be likely to migrate to the New Tower if it was forced to do by the termination of the 2003 Agreement, but it is equally clear from the evidence, and we so find, that Vodafone has no desire to do so, if it can stay on the Vodafone Site.

Ultimately, one comes back to the same point, which is that what is really at stake here is Icon’s investment in the Orange Site. This seemed to us to be confirmed by the following statement by Mr Watkin, in his closing submissions, at [T7/149/22-150/4]:

“But the major point in relation to this is that what we're losing is the ability for Icon to invest and try and achieve a return on its investment, and the difficulty is that you can't work out how that's going to be. Icon has lost the opportunity to try and make a profit, and it's no good just saying, "Well, there's no evidence that they can make a profit and therefore there's no prejudice to them".”

We agree with Mr Watkin that the First Condition cannot be said to be met in the present case on the basis that there is no prejudice. We are not engaged in quantifying loss. We are not required to undertake this exercise and we are not in a position to undertake this exercise. Nor does the evidence permit us to find that there is no prejudice; see our analysis immediately above. We are however engaged in considering whether the prejudice is capable of being adequately compensated in money. In answering that question Mr Watkin’s submissions seems to us, as we have said, to confirm that what is really at stake here is Icon’s investment in the Orange Site.

It is perhaps worth adding that we have not seen the evidence to establish that a valuable business opportunity would be lost if the Notional Order was made. The making of the Notional Order would have the effect that Icon could not secure vacant possession of the Vodafone Site and would not be able to demolish the Vodafone Mast. We have accepted that, if the 2003 Agreement was brought to an end, with no new code agreement, there is a reasonable prospect that Vodafone would migrate to the New Tower; see the relevant part of our analysis of Preliminary Issue (c). We have been unable to make any similar finding in relation to the remaining MNOs using the Masts. As we have understood Icon’s commercial objective, it is to have all four MNOs migrate to the New Tower. Whether that could be achieved seems to us to be up in the air. We accept that this is not directly relevant to the question of whether the First Condition is met because, as we have endeavoured to make clear, we are not concerned with actual quantification of the prejudice to Icon. We mention the point because it seems to us to demonstrate that there would be scope for argument, on the quantification of the loss of the investment, as to the true extent of the loss said to have been caused by the Notional Order.

The second difficulty with the Respondents’ case is that we cannot see why any prejudice to Icon cannot adequately be compensated by money. As we have explained, the prejudice, on a worst case scenario, is essentially the loss of Icon’s investment in the Orange Site. We cannot see why this loss cannot adequately be compensated by money. So far as quantification is concerned we have found the evidence of Mr Kay helpful in understanding Icon’s business model and commercial objectives. We do not accept that it would be a difficult exercise, let alone an impossible exercise to put a value on the loss of Icon’s investment in the Orange Site, either in terms of past expenditure or in terms of anticipated future profit from the New Tower, or in terms of the resolution of the planning position. Courts and tribunals regularly carry out exercises of this kind. We reject the Respondents’ submission that the exercise would be one of guesswork; to use the language of AL Smith LJ in Shelfer. In our view the detriment which Icon would suffer, if the Notional Order was to be made, is perfectly capable of being quantified and is perfectly capable of taking into account both the commercial position and the planning position.

If one asks the question posed by Sachs LJ in Evans, it seems to us, by analogy and taking into account all the circumstances of the present case, that there would be nothing unjust in Icon being confined to compensation in money in the present case, assuming the making of the Notional Order. Indeed, if this was an injunction case, and we were exercising the discretion of a court in relation to the question of whether an injunction should be granted or whether Icon should be confined to a remedy in damages, we would have no hesitation in deciding that Icon should be confined to a remedy in damages. The key point seems to us to be one which we have already made; namely that all that is at stake here, assuming the making of the Notional Order, is Icon’s investment in the Orange Site.

We also find the authorities cited to us by the Respondents’ counsel to be helpful in this context. We have already made reference to Shelfer and Evans. It seems to us that the facts of Sunrise Brokers and Software Cellular Network can be contrasted with the present case. Sunrise Brokers was a case in which an injunction was sought by an employer to prevent an employee working for a competitor. The difficulties with assessing damages in such circumstances were explained by Underhill LJ in the following terms, at [53]:

“53

I accept that there was no positive argument advanced below that damages would be an adequate remedy for the claimant if the defendant joined EOX sooner than his contract permitted: what Mr Duggan told us is confirmed by the transcript of the closing submissions. I do not find that surprising. In a case of this kind there are evident and grave difficulties in assessing the loss which an employer may suffer from the employee taking work with a competitor: even where it is possible to identify clients who have transferred their business (which will not always be straightforward, particularly where the new employer is outside the jurisdiction) there may be real issues about causation and the related question of the length of the period for which the loss of the business could be said to be attributable to the employee’s breach. If the sums potentially lost are large they will not be realistically recoverable from the employee in any event: in the present case no claim was advanced against EOX. There may be other intangible but real losses to the employer’s reputation. I do not say that there may not be particular cases in which relief should be refused on the basis that damages are an adequate remedy - Mr Craig referred us to Phoenix Partners Group LLP v Asoyag [2010] IRLR 594 - but unless a specific case to that effect was explicitly advanced, the judge was in my view fully entitled to proceed on the assumption that injunctive relief was the appropriate remedy.”

The position in the present case bears no relation to the facts of Sunrise Brokers and, in our view, gives rise to none of the problems identified by Underhill LJ in the extract from his judgment quoted above. The same applies to Software Cellular, where the court was concerned with whether damages would be an adequate remedy in the context of a claim by the claimant, trading as Truphone, for an order requiring T-Mobile to activate the Truphone numbers. On the question of whether damages would be an adequate remedy, Mr Robin Knowles CBE QC (sitting as a Deputy Judge of the High Court, as he then was) said this at [32]-[34]:

“32.

Truphone argues that it will be impossible to quantify the loss that it suffers as a result of its inability to launch a full service. It makes a credible claim that its commercial survival will be in doubt if it must await trial, even a speedy trial, before it can (if successful at that trial) launch a full service.

33.

T-Mobile urged that Truphone can launch a service, even of not a full service. Indeed some publicity material suggested that it had already, although Truphone emphasised that this material had been issued prematurely. To my mind however, the size of T-Mobile’s share of the UK mobile telephone market or the call origination market in the UK must mean that it is realistic that a service launched now without the ability to receive calls from a T-Mobile number to a Truphone number would be the launch of a materially compromised service.

34.

On any view the loss suffered should Truphone show at trial that it was throughout entitled to be able to launch a full service, and not simply a compromised service, would be very hard to quantify reliably. Quite possibly, in a rapidly developing market and taking into consideration customer loyalty, the losses would reach forward as well as lie in the past.”

Again, the contrast with the present case seems to us to be clear. In the present case we cannot see that there is any risk of Icon’s overall business model or reputation being compromised in any way, simply by the loss of its investment in the Orange Site. Icon’s position bears no resemblance to that of Truphone in Software Cellular.

In summary it seems to us that the prejudice caused to Icon by the making of the Notional Order can adequately be compensated by money.

This is sufficient to allow us to determine the question of whether the First Condition has been met in the present case. There is however a further argument with which we should deal in relation to the First Condition, which was raised on Vodafone’s side. Vodafone’s counsel argued, and Mr Radley-Gardner stressed in closing submissions that Icon found itself in a predicament of its own making. It had launched a speculative build, in the hope of attracting MNOs, and it was its look out if it was unable to attract any MNOs to the New Tower. The same argument might equally be applied to the planning position. In that context also Icon has taken the risk of constructing the New Tower, in circumstances where the Prior Approval required the removal of the Masts. Icon thus took the risk that it would not be able to satisfy this planning requirement, with the result that its present planning difficulties are entirely of its own making.

There is considerable attraction in arguments of this kind, essentially because Icon’s position is an unattractive one. Icon chose to take the risk of constructing the New Tower in circumstances where it could not be confident that it would be able to meet the planning requirement to remove the Masts. The planning requirement did not come out of the blue. It was part of the Prior Approval Application. In these circumstances it can be said that Icon’s current planning predicament and the possible loss of its investment in the New Tower are problems entirely of its own making. It took a risk with its scheme and the risk has been realised.

We are not however persuaded that arguments of this kind have much relevance to the question of whether the First Condition is met. We say this for two reasons.

First, there is no general merits test in the First Condition. The fact that the prejudice to Icon can be said to be self-induced does not seem to us, in and of itself, to be a factor which we should be taking into account in deciding whether the First Condition has been met. At best it seems to us that this is a factor which can be taken into account, as part of the overall circumstances of the case, in deciding whether it is just that Icon should be confined to a financial remedy in respect of its prejudice. We have already concluded that this is just, without reference to this particular factor, but this factor may be said to provide further support for our conclusion. This however seems to us to be the limit of the role this factor can play.

Second, arguments of this kind would be relevant if they went to the question of causation which is engaged by the First Condition. The prejudice to the relevant person must be caused by the order referred to in Paragraph 21(2); that is to say the prejudice must be caused by the Notional Order. There is therefore a causation requirement in the First Condition. In the present case we can see the argument that the prejudice caused to Icon would not be caused by the Notional Order, but has already been caused by Icon’s decision to take the risk of proceeding with the construction of the New Tower, without securing its position in relation to the removal of the Masts. We confess that, at first sight, the argument has a considerable attraction. We are not however persuaded that this argument is correct, on the facts of the present case. As we have indicated, it can certainly be said that Icon’s current problems have been caused by its decision to proceed with the construction of the New Tower at its own risk. The problem for this argument is that, as it seems to us, it can equally be said that Icon would be able to resolve these problems, at least so far as the Vodafone Site is concerned, if the Notional Order was not made, thereby opening the way to Icon being able to remove the Vodafone Mast. In our view this is sufficient to establish the required causation between the making of the Notional Order and the prejudice to Icon.

We therefore conclude that the argument that Icon is in a predicament of its own making is only relevant, to the question of whether the First Condition is met, to the limited extent we have identified above.

Nevertheless, we have already concluded, for the reasons stated above, that the prejudice caused to Icon by the making of the Notional Order is capable of being adequately compensated by money. Drawing together all of the above analysis, we therefore conclude that the First Condition is met in the present case.

Is the Second Condition met?

Turning to the Second Condition, we have already identified the prejudice to Icon, in our analysis of the First Condition. The question is whether the public benefit likely to result from the making of the Notional Order outweighs the prejudice to Icon.

As the Tribunal stated in the University of Arts case, at [51], the test is a stiff one:

“The test for the imposition of such rights is quite a stiff one; for the respondent to escape this public duty, unless it is itself going to redevelop the site, it must show either that it will suffer loss that cannot be compensated in money, or that the prejudice it will suffer is so great that it outweighs the public benefit derived from the use of the site. The level of prejudice must be very high indeed to outweigh the public benefit, in the light of the public demand for, and dependence upon, the availability of electronic communications.”

This leads into the question of how one measures public benefit. The Respondents contend that, in assessing public benefit, it is legitimate to take account of the fact that the New Tower is available for Vodafone’s use, if it is unable to obtain a new code agreement in relation to the Vodafone Site.

This question was considered by the Tribunal in Cornerstone Telecommunications Infrastructure Limited v University of London [2018] UKUT 356 (LC). The case was concerned with an application for the imposition of an agreement permitting the claimant to obtain access to the roof of one of the respondent’s buildings, in order to survey the building and decide whether it was a suitable location for ECA. This gave rise to several issues, one of which was whether, assuming jurisdiction to make such an order, the claimant had shown a good arguable case that the Conditions were satisfied. On this issue, the claimant did not have to satisfy the Conditions, but rather had to demonstrate a good arguable case that it could satisfy the Conditions.

Although the Tribunal was concerned with the question of whether there was a good arguable case that the Conditions could be met, it was still necessary for the Tribunal to determine the legal framework of the Conditions. This included the question of whether, in considering the question of public benefit, it was relevant to consider the availability of alternative sites which the claimant could use. The Tribunal considered that a comparison of this kind was neither required nor permitted. As the Tribunal explained, at [131]-[133]:

“131.

There was a certain amount of cross examination and submission about the availability of alternative sites which might be used by the claimant instead of the University’s Building. I do not regard that evidence as directly relevant to the para.21 test to be applied by the Tribunal. The focus of para.21(3) (the second condition) is the public benefit likely to result from the making of the order sought by the operator. No comparison is required (or permitted at this stage) between that public benefit and the public benefit which might result from the making of a different order conferring rights over different land. Mr Radley-Gardner referred to a decision of the Court of Appeal under the old Code, St Leger-Davey v First Secretary of State *J.P.L. 344 [2004] EWCA Civ 1612 at [22]–[24]; [2004] 12 WLUK 3 *J.P.L. 344 in support of his submission that a comparison between sites was not relevant to the second condition. I agree with his submission, but I do think the Court of Appeal’s decision supports it, as the test under the old Code was materially different.

132.

If any further underpinning is required of what seems to me to be the clear effect of para.21(3) it can be found in paras 4.32 and 4.33 of the Law Commission’s Report, to which Mr Radley-Gardner also referred. The Commission rejected the suggestion made by one consultee that an operator should be required to show that there was no reasonable alternative to the land over which rights were sought; it considered that approach would be "impractical and too stringent" and would be likely to produce stalemate where two or three sites were possible.

133.

The choice of sites is left by the Code to the judgment of operators. It might possibly be argued that the availability of an alternative site was relevant to the exercise of the Tribunal’s discretion (as to which I express no concluded view) but, generally, a comparison between sites is not required to demonstrate satisfaction of the second para.21 condition.”

The reference to the Tribunal’s discretion in [133] was a reference to the Tribunal’s discretion under Paragraph 26(3), which was engaged because the application was one for interim code rights under Paragraph 26. This discretion is not engaged in the present case.

The determination of the scope of public benefit by the Tribunal in the University of London case was followed and applied by the Tribunal in the University of Arts case, at [27]:

“27.

We have to consider in detail the parties’ arguments about those two conditions. We begin by saying that we accept what the claimant says about the public benefit of making the order sought. This is a busy urban area comprising retail, residential and university premises where electronic communications are in constant demand, and indeed the provision of such communications is an important element in the redevelopment plans. This is a suitable site to replace the buildings the claimant has had to leave. It is now well-established (see Cornerstone Telecommunications Infrastructure Limited v University of London [2018] UKUT 356 (LC), paragraphs 131 – 133) that it is no part of the Tribunal’s task to consider whether alternative sites would do just as well. In any case it is not clear that any alternatives are available, save for the possibility that the claimant might share the rooftop site by agreement with MBNL on behalf of EE and H3G. Whether sharing would be on offer is not known, but in any event we regard such a sharing arrangement as in effect an alternative site which we do not have to consider. We have to weigh the public benefit arising from the imposition of a paragraph 20 agreement as if the alternative were that the claimant does not operate from the roof-top; that benefit is not diminished by the fact that the same benefit might be achieved by the use of an alternative site or of a sharing deal on the same rooftop.”

On the basis of these two authorities Mr Radley-Gardner submitted that the identification of the public benefit likely to result from the making of the Notional Order was a simple exercise. The existence of the New Tower is not taken into account in the exercise. One simply needs to look at what is on the Vodafone Site and ask whether it is productive of public benefit. The answer to that question, so he submitted, was straightforward. The Vodafone Mast is propagating the networks of two operators; namely Vodafone and Telefonica. If the Notional Order is made, the Vodafone Mast can continue to do so.

For his part Mr Watkin submitted that the situations in the University of London and University of Arts cases could be distinguished. In the present case, as he pointed out, the person against whom code rights are assumed to be sought pursuant to Paragraph 20 is the party able to provide Vodafone with what is, on the evidence, a suitable alternative site on the New Tower. Mr Watkin also submitted that if one was compelled only to consider the Vodafone Mast, and thereby to conclude that Vodafone’s network service would be lost if the Notional Order was not made, this would collapse the question of public benefit into the question of whether the person making the application under Paragraph 20 was an operator or not. We understood Mr Watkin’s point to be that if the person making the application was an operator, and if the availability of an alternative location could not be considered, the operator would always be able to demonstrate a public benefit as a result of being allowed to remain on the relevant site, because an assumption would be required, whether contrary to reality or not, that otherwise the network services of the operator would be lost from that location.

We are inclined to agree with Mr Watkin that the present case can be distinguished from the University of London and University of Arts cases. In those cases, as it seems to us, the Tribunal was saying that it was not permissible to conduct a general inquiry into whether alternative sites were available. No comparison was required (or permitted) at that stage between the public benefit resulting from the order sought by the operator in relation to the relevant site and the public benefit which might result from the making of a different order conferring rights over different land; see the decision in University of London at [131]. We are inclined to think that the Tribunal did not, in either of these cases, intend to impose a general rule of law to the effect that the availability of an alternative location for an operator can never be taken into account in assessing the public benefit likely to result from the making of the Notional Order. In the present case the Respondents are not seeking to establish that there are suitable alternative sites which Vodafone could use. Their argument is that Icon, the site provider in respect of the Vodafone Site, can provide an alternative site which, on any view of the matter, offers equivalent or better facilities through which Vodafone can operate its network.

We do not think that it is necessary to express a concluded view on whether Mr Watkin is right in his argument, or on the thoughts which we have expressed in our previous paragraph, for reasons which we shall explain shortly. We are prepared to proceed on the basis that, on the particular facts of this case, it would be wrong to disregard the reality that there would be a suitable alternative site available to Vodafone, if the Notional Order was not made.

In terms of the Second Condition however, the Respondents’ argument assumes that there would be no public benefit likely to result from the making the Notional Order, because Vodafone could continue to operate its network from the New Tower, and the network would remain available for the use of the public, as before.

In our view there is a serious flaw in this argument. As Mr Radley-Gardner reminded us in his closing submissions, the commercial driver behind the construction of the New Tower and Icon’s opposition to the renewal of the existing code agreement (the 2003 Agreement) is for Icon to avoid the deleterious consequences of the renewal of the existing code agreement at new Code rents. The object is to capture the four main MNOs, who are currently making use of the Masts, and require them to migrate to the New Tower, where they will be required to pay commercial rents, as opposed to Code rents.

The reason why the rents payable for space on the New Tower would be commercial rents, and thus higher or likely to be higher than Code rents, is because the Code contains provisions, in Paragraph 24, which govern the amount of consideration (rent) payable by an operator to a relevant person under a code agreement. Paragraph 24(3) sets out the assumptions on which the market value of the rent is to be assessed. These assumptions include, at sub-paragraph (a), the assumption that the right that the transaction relates to does not relate to the provision or use of an electronic communications network. This assumption therefore avoids any uplift in value which results from the fact that the relevant site is to be used as a mobile communications site. Also included is the assumption, at sub-paragraph (d), that there is more than one site which the buyer could use for the purpose for which buyer seeks the right.

The purpose of the valuation provisions in Paragraph 24 is to ensure that operators are not required to pay rents which reflect the rent which would be payable on the open market. Matters such as scarcity of available sites and the fact that the relevant site may be critical to an operator’s network fall to be disregarded. This is consistent with the overall purposes of the Code, which include ensuring the availability of mobile communications facilities to the public as widely as possible and at competitive prices. Parliament has decided, in enacting the Code, that it is in the public interest that operators should have the benefit of paying Code rents, rather than open market rents, for the sites they use. This, in turn, is consistent with a matter to which we are required to have regard, in deciding whether the Second Condition is met; namely “the public interest in access to a choice of high quality electronic communications services”.

In seeking to compel Vodafone to migrate to the New Tower, Icon is seeking to prevent Vodafone from having one of the benefits which Parliament intended to confer upon operators and, through operators, upon the public; namely the benefit of Vodafone paying a Code rent.

Looked at in this way it seems to us that a significant public benefit would result from the making of the Notional Order; namely that Vodafone would secure the advantage, which Parliament intended operators to have under the Code, of paying a Code rent for the site, in this location, from which it will operate its network. Putting the matter the other way round, if the Notional Order was not made, Icon would be able to deprive Vodafone of the advantage of paying a Code rent, and would be able to compel Vodafone to pay a market rent. This would, in our view, constitute a substantial detriment to the public, given that it would defeat one of the benefits which Parliament intended to confer upon operators by the Code and, through operators, upon the public. In our view, allowing this to occur would not be serving the public interest in access to a choice of high quality electronic communications services.

As the Tribunal noted in the University of Arts case, the level of prejudice must be very high indeed to outweigh the public benefit, in the light of the public demand for, and dependence upon, the availability of electronic communications. It is no answer to this, in the present case, to say that a suitable alternative site is available, so that there is no loss of network facilities to the public. The suitable alternative site is not available on terms which ensure the continuation of the benefits which the Code was intended to confer upon the public; in this instance meaning a Code rent.

In their submissions the Respondents’ counsel identified what they referred to as wider public disbenefits. As however we have already stated, in our analysis of the question of whether the First Condition is met, we do not accept that these wider disbenefits exist. In particular, we do not accept that the public benefit which we have identified as resulting from the making of the Notional Order falls to be diminished or disregarded because the benefit of a new Code agreement will pass to CTIL. This factor does not alter the fact that Vodafone will have been forced off a Code rent on to an open market rent. Nor does this factor offset the damage to the purposes behind the Code which would be caused if the Notional Order was not made and Icon’s commercial objective was thereby achieved.

The Second Condition requires that the public benefit “likely” to result from the making of the Notional Order outweighs the prejudice to the relevant person, namely Icon. Drawing together all of the above analysis, we conclude that the public benefit which will result from the making of the Notional Order outweighs the prejudice to Icon. We are only required to conclude that the public benefit likely to result from the Notional Order outweighs the prejudice to Icon, in order to find that the Second Condition is met. Clearly, our conclusion satisfies that requirement. On any view of the matter the public benefit which is likely to result from the making of the Notional Order outweighs the prejudice to Icon.

We therefore conclude that the Second Condition is met in the present case.

Preliminary Issue (d) - conclusion

Our conclusion on Preliminary Issue (d) is that Icon cannot rely on Paragraph (d). For the reasons which we have stated, the test under Paragraph 21 for the imposition of the code agreement on the site provider is met. Accordingly, Paragraph (d) is not engaged.