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Lawbite: Ending the relationship - the validity of notices under Paragraph 31 of the Electronic Communications Code

  • United Kingdom
  • Litigation and dispute management
  • Real estate
  • Real estate litigation - LawBite

08-10-2020

EE and H3G Ltd v (1) Edelwind and (2) Secretary of State for Housing Communities [2020] UKUT 0272 (LC)

This case concerned the validity of two notices served under paragraph 31 of the Electronic Communications Code (“the Code”) which sought to determine the Claimant operators’ code rights on the ground of redevelopment.

The First Respondent, Edelwind, was the freehold owner of a building of which the Second Respondent, the Secretary of State for Housing Communities, was lessee. There were two Code agreements:

  • first, an agreement between the Second Respondent and EE granting EE Code rights in respect of apparatus on the roof of the building (‘the primary Code agreement’)
  • second, an agreement between the former freehold owner, the Second Respondent and EE under which the then freeholder gave consent to the grant of code rights to EE and agreed to be bound by the terms of the primary Code agreement (‘the secondary Code agreement’)

The primary Code agreement was due to contractually expire on 29 November 2024. 

One of the issues the Tribunal had to examine was the evidence that arose that the Second Respondent had served notice under a conditional break clause in its lease to bring the lease to an end on 2 April 2021 and whether that notice was valid. That was relevant here because it was agreed that as and when the Second Respondent’s leasehold interest ceased then, so too would the primary Code agreement, save for statutory continuation under paragraph 30 of the Code.

The Claimants argued that the notices were invalid for two reasons. First, the ‘date point’, because the notices were served too early. Second, the ‘recipient point’, because the notices were served on the First Claimant only and had not been served on the Second Claimant. It was argued they should have been served on both.

The date point

The termination date specified in the Code notices were after the break date for the Second Respondent’s lease but before its contractual expiry date. This was significant because if the lease would not end on the break date, the date specified in the Code notices would be premature, causing the Code notices to be invalid.

The second respondent’s break notice would only take effect if certain conditions were fulfilled.

The Tribunal accepted the Claimants’ contention that the Tribunal had to find, on the balance of probabilities, that the Second Respondents’ lease would end on the break date as opposed to the First Respondent’s argument that it only needed to be satisfied that the lease would probably end on the break date. The Tribunal accepted the standard was met and that, on a balance of probabilities, the Second Respondents’ lease would end on the break date.

The Tribunal also found that the secondary Code agreement would not subsist after the primary Code agreement came to an end

The Code notices were therefore not invalid by reason of the termination date specified.

The recipient point

The ‘recipient point’ turned upon a purported assignment of the primary Code agreement from the EE to both EE and H3G was an assignment of a lease or a licence. It was agreed that if the primary Code agreement was found to be a lease then that assignment was effective, but not otherwise.

The Claimants contended that both code agreements were leases. Conversely, the Respondents contended they were both licences.  

Having construed the terms of the agreements, the Tribunal determined that  both were licences, not leases. Accordingly, there had been no assignment to the H3G and, in turn therefore, there was no requirement for H3G to be served with a Code notice.

The notices were found to be valid. EE therefore failed to successfully challenge the validity of the Code notices on either the date point or the recipient point.

Key points

  • the matter will now proceed to consider whether the respondents can make out the requisite intention to redevelop
  • the fact the Tribunal was required to consider evidence as to whether a break notice had been served between the respondents  and the fact that at time the Code notices were served the relevant information was not provided to the Claimant operators is a reminder as to the need for a carefully planned and properly implemented strategy when seeking to bring a Code agreement to an end.
  • paragraph 31 of the Code requires a site provider to give notice in the prescribed form, specifying the ground upon which the Code agreement is to end and a date at which the Code agreement is to come to an end which must be after the end of the period of 18 months beginning with the day on which the notice is given. This is stage one of the process. Stage two is addressed under Part 6 of the Code which deals with the removal of apparatus