Court of Appeal in CTIL v Ashloch and APW [2021] EWCA Civ 90

The Court of Appeal has upheld the decision of the Deputy President of the Upper Tribunal, Martin Rodger QC.

• Where an Operator occupies pursuant to a tenancy which was granted before the Electronic Communications Code (the Code) came into force on 28 December 2017 and under which the Operator is "holding over" pursuant to s24(1) of the Landlord & Tenant Act 1954 (the 1954 Act) after contractual expiry, the Upper Tribunal has no jurisdiction under Paragraph 20 of Part 4 of the Code to impose Code rights. Instead the Operator must follow the renewal procedure in the 1954 Act
• The Court of Appeal confirmed that the definition of "Occupier" is a point to be considered further by the Supreme Court in the appeal in CTIL v Compton Beauchamp and so not a point for the Court of Appeal in this case
• The Court of Appeal also commented that, if the Operator occupied before the Code came into force and did not do so pursuant to a written agreement then, as there was no "subsisting agreement", it appears that, by reason of the transitional provisions of the Code, the Operator will not have Code rights to renew its agreement in those cases.

Background

Schedule 2 of the Code sets out the transitional provisions. In relation to written agreements in existence as at 28 December 2017, the Code shall also apply to those existing agreements but subject to modifications. Part 5 of the Code, which deals with the termination and modification of agreements, provides that the Code shall not apply at all if the existing agreement is a lease which is protected by Part II of the 1954 Act.

Facts

CTIL took an assignment of a lease where the current operator was already holding-over under the 1954 Act. CTIL wished to renew that lease on favourable terms under the Code.

As the transitional provisions of the Code modified Part 5 so that it does not apply in circumstances where an existing lease is protected by the Act, CTIL instead served a Paragraph 20 notice under Part 4 of the Code to request that the Tribunal impose a fresh agreement for new code rights under the Code.

The Upper Tribunal

The Upper Tribunal held that an Operator was not permitted to use Part 4 of the Code to renew its lease where it was already in occupation pursuant to a protected lease under the 1954 Act. The Upper Tribunal noted the dicta of Lewison LJ in the Court of Appeal decision in CTIL v Compton Beauchamp Estates [2019] UKUT (LC) that, where an Operator with a subsisting written agreement was in situ its renewal rights were governed by Part 5 of the Code rather than Parts 2 or 4.

The Court of Appeal

In his lead judgment, Lewison LJ considered the arguments put to the Court of Appeal that, although the transitional provisions prevent Part 5 of the Code applying where an Operator is in occupation under a protected lease under the 1954 Act, the transitional provisions do not expressly prevent Part 4 of the Code from applying.

However, Lewison LJ, endorsing the reasons set out in the Tribunal's judgment, held that in these circumstances an Operator is not entitled to make an application under Part 4 of the Code.

Lewison LJ referred to the decision in CTIL v Compton Beauchamp Estates [2019] UKUT (LC) and the key point established in that case that Code rights under Part 4 could only be conferred by the occupier. As CTIL was already "the occupier", that disallowed CTIL from using Part 4 to renew its lease. He said that the wider issue as to who legally is the "occupier" under part 4 is for the Supreme Court to consider as part of the appeal in that case rather than for the Court of Appeal in the current case.

Please contact James Rees or other colleagues in our Property Disputes Team if we can assist you with any further questions.