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

The code agreement to which we have referred above, by which Vodafone was granted a set of rights in respect of the Vodafone Site, is a deed of agreement dated 31^st July 2003. This agreement was entered into between William Buck and Patricia Buck, as freehold owners of the Vodafone Site, and Vodafone, as user of the Vodafone Site, for a term of 15 years from 31^st July 2003.

It is common ground that this agreement (“the 2003 Agreement”) constituted a code agreement under the Old Code. The contractual term of the 2003 Agreement expired on 30^th July 2018, shortly after the Code came into force. As such, the 2003 Agreement is treated as a subsisting agreement, within the meaning of paragraph 1(4) of the transitional provisions in Schedule 2 to the Digital Economy Act 2017, and is thus treated, at least so far as the principal matters relevant to this decision are concerned, as a code agreement under the Code. One consequence of this was that the 2003 Agreement was continued beyond its contractual expiration date by Paragraph 30(2). Another consequence is that the provisions for termination and modification (and renewal) contained in the Part 5 of the Code apply to the 2003 Agreement.

The rights granted to Vodafone in respect of the Vodafone Site were set out in the Second Schedule to the 2003 Agreement, in the following terms:

“The right:-

1.

to erect install use operate maintain repair alter add to redevelop replace and renew (and when desired to remove any of) the Apparatus on the Site (and any cables under the Land) using all machinery necessary to undertake the Works

2.

to install within the Equipment Cabin such telecommunications equipment as the Company requires for the Permitted Use

3.

to install maintain repair replace and use electricity and communications cables across or under the Land leading to and from the Apparatus either in the position shown on the Drawing or as otherwise approved by the Owner and (where agreed) to connect into the Owner's electricity supply

4.

at all times of full and free access both with and without vehicles over and along the Land and any other land owned or controlled by the Owner to and from the Site by the most convenient and direct route(s) from the nearest public highway to carry out the Works and to exercise the rights granted by this Agreement PROVIDED that all persons using such access route(s) comply with such reasonable security procedures as are required by the Owner

5.

while the Works are being carried out to occupy a reasonable working space surrounding the Site and to park vehicles and to temporarily store equipment in places reasonably convenient to the Site and thereafter to park a vehicle adjacent to the Site during maintenance visits but not so as to obstruct reasonable access by the Owner to other parts of the Land

6.

to enter onto the Land to undertake a planting scheme on the Land around the perimeter of the Site in order to allow the Company to comply with the planning permission granted (or to be granted) to it in connection with the Site and thereafter to maintain renew and replace any plants”

By the Third Schedule to the 2003 Agreement Vodafone entered into a series of obligations in relation to the Vodafone Site. For present purposes the relevant obligation is contained in paragraph 1.11 of the Third Schedule, relating to alienation. The obligation is in the following terms:

“1.11

Alienation

1.11.1

the Company will not transfer or share its rights under this Agreement or part with possession of the Site to a third party without the Owner's consent save that the Company may (without the Owner's consent being required) transfer the benefits of the rights granted by this Agreement or share such rights with any company which is a member of the same group of companies (within the meaning of Section 42 of the Landlord and Tenant Act 1954) ("group company")

1.11.2

notwithstanding the provisions of paragraph 1.11.1 the Company may share the Site with third parties wishing to install telecommunications equipment on the Site PROVIDED that the Owner is notified in advance of such installation and that the Company will pay to the Owner 30% of any rental income actually received by the Company from any third party (other than a group company) in respect of such arrangement”

Paragraph 8.4 of the Fifth Schedule to the 2003 Agreement provided as follows, in relation to the rights granted by the 2003 Agreement:

“8.4

The rights granted to the Company by this Agreement shall extend to the exercise of those rights by its agents contractors personnel telecommunication link providers and others authorised by the Company from time to time but in all other respects the Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement”

The question of whether the 2003 Agreement took effect as a lease or a licence is not one which has been addressed by the parties. We were not invited to go into this question, and we are not in a position to decide this question. Accordingly, nothing in this decision should be taken as expressing any view on this question, which we leave open. If the 2003 Agreement did take effect as a lease, we note that paragraph 9 of the Fifth Schedule thereto records an order of the court authorising the agreement of the parties that Sections 24-28 of Part II of the Landlord and Tenant Act 1954 (“the 1954 Act”) should be excluded from the 2003 Agreement. Putting the matter more simply, if the 2003 Agreement did take effect as a lease, it was contracted out of the protection of the 1954 Act, as a business tenancy. We note, in passing, that the provisions of Part 5 of the Code do not apply to a subsisting agreement, within the meaning of paragraph 1(4) of Schedule 2 to the Digital Economy Act 2017, where the relevant agreement is a lease to which the 1954 Act applies, which has not been contracted out of the protection of the 1954 Act; see the transitional provisions in paragraph 6 of Schedule 2. We assume that the lease/licence question is not important, in terms of what we have to decide, because the 2003 Agreement, if it did take effect as a lease, was contracted out of the protection of the 1954 Act, and would thus not be caught by the transitional provisions in paragraph 6 of Schedule 2.

The 2003 Agreement contains an arbitration clause, at paragraph 6 of the Fifth Schedule. None of the parties have sought to invoke the arbitration clause, either in the Renewal Proceedings or in the Termination Proceedings.

The 2003 Agreement was varied by a deed of variation, entered into between the same parties, on 15^th July 2010 (“the Deed of Variation”). The variations were set out in clause 1 of the Deed of Variation. For present purposes, the relevant variation is that effected by clause 1(v) of the Deed of Variation, which was in the following terms:

“(v)

the following shall be added as a new paragraph 1.11.3 of the Third Schedule to the Agreement:

“notwithstanding the other provisions of paragraph 1.11 the Company may share the whole or any part of the Site and the rights contained in this Agreement with Telefonica O2 UK Limited (company number 01743099) whose current registered office is at 260 Bath Road, Slough, Berkshire, SL1 4DX (“O2”) for no additional payment and without the Owner’s consent being required”

In the remainder of this decision references to the 2003 Agreement mean, unless otherwise indicated, the 2003 Agreement as varied by the Deed of Variation. References to “the Alienation Clause” mean paragraph 1.11 of the Third Schedule to the 2003 Agreement, as varied by the Deed of Variation. References to “the Rights” mean the rights granted to Vodafone in respect of the Vodafone Site by the Second Schedule to the 2003 Agreement.