Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2022] UKSC 18 (22 June 2022)
Citation:Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2022] UKSC 18 (22 June 2022).
Subjects invoked: 15. 'Contract'. 44. 'Heritable property'.
Rule of thumb:Can you upgrade equipment on your land in order to compete in your business sector? If Telecommunications companies have telecommunications apparatus in fields or on top of buildings – satellite, mast, coding equipment – can they vary the terms of their lease-contracts with land-owners to update the technology in their apparatus? Yes. Telecommunications companies can follow a legal process outlined in the 2003 Communications Act to vary the terms of their contract to allow them to update their code/technology in their apparatus. They do not have to wait until the end of the contract to do so, or pay lots of money to have the contract varied. The 2003 Act ensures that telecommunications companies in the UK have flexibility to ensure that new technologies can be induced into their contract in a fair, efficient and reasonable way.
Background facts:
This case invoked the subject of contract law. It particularly invoked the principle of variation of contract, and the scenario where a person with a lease wishes to have the terms varied/updated to allow them to run their business more efficiently.
The facts of this case were that there were 3 co-joined actions raised by Cornerstone, which is a joint venture by Vodafone and O2, as well as Tower UK Ltd. Cornerstone/Vodafone/O2 raised the first 2 actions, and the other action was raised by Tower UK. They were all very similar actions with all 3 actions about the parties wanting to put additional code in their masts/satellites for improved telecommunications/internet services, although all had slightly different facts.
In all 3 locations the 3 telecommunications companies all had long-term contracts with land-owners/occupiers for around 10 years+ to have this satellite, mast and coding equipment there. However, these long-term contracts became a problem rather than a benefit because the 3 of them wanted to vary the terms to put in more advancing coding inside their apparatus. In order to update the new code, their contracts with the owners or occupiers of the land had to be varied however, which required the consent of the landowners or occupiers. The telecommunications companies wanted these contracts to be varied seamlessly and at reasonable costs, whereas the landowners or occupiers wanted a pay-day to vary & update the contracts, which they believed was their contractual right. The question for the Court was the process for how this contract could be varied.
Judgment:
The Court held that the solution for how to vary these contract lay in the Communications Act 2003, in particular in paragraph 9 and paragraph 20 of the Code within it. Where the telecommunications company is both the operator of the telecommunications equipment as well as the only occupier of this field, then paragraph 20 applies, and they have to renegotiate with the landowner to try to reach a fair and reasonable settlement, failing which they then apply to the Land Tribunal for a decision. Where the Telecommunications company is the operator of their mast, but not the occupier of the field, then paragraph 9 applies, and they have to seek to vary the contract with the occupier of the field, and if no fair and reasonable settlement can be reached, then they have to apply to the Land Tribunal for a decision. In terms of the third scenario the Court simply said that the background facts were not clear enough to make a decision. The Court affirmed that the purpose of the Communications Act 2003 was to give telecommunications companies in the UK a fair and reasonable way of improving their equipment & coding to ensure fast internet speed across the UK, without having to wait until the end of the contract to do so (or effectively being vulnerable to landowners or land-occupiers using major leverage against them), and this is what the Court provided a solution with. The Court essentially held that telecommunications companies in the UK should be able to vary their contracts for their apparatus on sit by updating the code there in an efficient and reasonable way.
Ratio-decidendi:
'119. … the Code was devised with the knowledge that on the one hand, operators will need a long fixed term interest in the land to justify their investment in installing the ECA on site, but on the other hand that this is an industry in which technology develops very quickly and where the Government’s policy is that new improvements to digital infrastructure are rolled out across the country swiftly. The concern that rights will be frozen during the initial fixed term and cannot be supplemented… This is not the optimum way for the regime to operate. The fact that so many kinds of code rights are enumerated suggests to me that the parties should be able to choose from that menu which of those they need to include in the initial fixed term but should be able to add to them, either by agreement or by invoking the jurisdiction of the tribunal…. CONCLUSION 171. In conclusion, I would hold that the Court of Appeal erred in holding that the proper construction of the new Code results in the tribunal having no jurisdiction to consider an application under Part 4 of the new Code from an operator on the grounds that that operator is in occupation of the site because of the presence there of its ECA. 172. On Tower’s appeal is allowed. 173. Cornerstone’s appeal in the Compton Beauchamp appeal is dismissed because on the facts assumed before the Upper Tribunal and the Court of Appeal, Compton Beauchamp was not the occupier of the site to which Cornerstone’s application related and so was not the appropriate recipient of Cornerstone’s notice under para 20(1)(a) of the new Code. 174. The outcome of Cornerstone’s appeal in the Ashloch case will await the further submissions of the parties as I have indicated. Lady Rose '
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.