Tinsel, Towers and Telecoms: The Winter FTT Round-Up: Part 2

All we want for Christmas…is vacant possession

Icon Tower Infrastructure Limited (“Icon”) v On Tower UK Limited (“On Tower”)

It isn’t the first time that Icon has found itself in front of the tribunal. This time it was to establish whether they had redevelopment intention sufficient enough on their site at Queen’s Oak Farm, Northamptonshire, to resist On Tower renewing its Code rights.

In order for site providers to succeed with a redevelopment defence, they must show an intention to redevelop and an inability to reasonably do so if Code rights were granted. 

Part of the test is a subjective one and involves establishing whether the redevelopment intention is genuine. The other aspect is objective and considers whether there is a reasonable prospect of the redevelopment being able to go ahead.

This case is a slightly unusual scenario in that rather than being your average landowner with a mast on their land, Icon is in itself a telecoms company which develops shared infrastructure sites and leases space to operators. As such, Icon’s redevelopment plans for Queen’s Oak Farm were to build their own new tower on the site in place of On Tower’s own existing mast, which they said had greater capacity, and would be built with the intention of encouraging the existing users of On Tower’s mast to migrate over to the new structure.

It was held that Icon had not satisfied the redevelopment test and, as such, On Tower was entitled to a new code agreement.

The main takeaways were:

• Icon did show genuine intention to redevelop and terminating On Tower’s agreement so as to build their own structure may well be legitimate redevelopment
• The issue in this case came with the fact that there were no guarantees that the current users of On Tower’s mast would migrate over to the new tower and the development of the new tower was dependent on this happening.
• Generally speaking, then, this case reminds us that even if a site provider has a clear and obvious redevelopment aspiration, the likelihood of this being feasible and probable is just as important in satisfying the test – if the green light for a project is contingent on third-party behaviour which looks unlikely to come to fruition, this may well be a stumbling block for a landowner.

Cornerstone Telecommunications Infrastructure Limited (“CTIL”) v Firoka (Kings Cross) Limited (“Firoka”) (Crowne Plaza Hotel)

The opposite outcome occurred in the Crowne Plaza Hotel. 

In this case, the owner of the hotel and landlord under CTIL’s existing code agreement had plans to redevelop the roof of the site by extending the plant room in order to improve the heating and cooling system in the hotel. 

The application for planning permission for this extension was put in as a first stage in a wider plan for more extensive upgrade works to the system as a result of various complaints from guests, and a general acceptance that, having been installed in 1992, it was in need of overhaul.

Firoka had already obtained planning permission for the initial stage of works by the time of the hearing, and, in addition, they gave an undertaking to the court that they would commence these works within nine months. In addition to this, they had also provided evidence of funding. 

CTIL argued that the works for which Firoka had been granted permission were insufficient to satisfy the redevelopment test and, in light of the fact that CTIL was offering to include a “lift and shift” clause in the renewal agreement, Firoka should not be permitted to prevent the renewal.

It was held that:

• Firoka had successfully made out the redevelopment test and, as such, CTIL’s Code rights would not be renewed and instead would be brought to an end.
• The undertaking given by Firoka was persuasive in showing genuine intention to carry out the scheme and, in any event, the extension of the plant room was incompatible with CTIL’s equipment remaining on the roof/the code agreement being renewed.
• Once a site provider has demonstrated a firm and settled intention, on the balance of probabilities, to redevelop its site, the redevelopment test has been made out, and the defence has been successful.
• As such, a landowner’s otherwise-ability to successfully satisfy the test should not be scuppered as a result of a Code operator proposing a “lift and shift” clause in a new agreement or otherwise attempting to interfere with a landowner’s plans.

Further peripheral observations of note

Without a successful redevelopment defence, the code agreement would have been imposed on the basis that any risk that the hotel may have suffered as a result of the equipment being on the roof (e.g. structural integrity) could have been adequately compensated in money. As such the extensive financial losses cited as a potential by Firoka if the upgrade works could not be carried out were not a material consideration for refusing the renewal.

Had the code agreement been imposed, the tribunal would have ordered an annual site payment of £6,950.