Property litigation weekly update – 10 December 2021


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In this week's bulletin, the team cover an important Court of Appeal decision on residential possession claims concerning property guardians, as well as a ruling on when upgrading and sharing rights can be claimed by Telecommunications operators.

When should orders for possession be made at a first residential possession hearing?

In Global 100 Limited v Laleva [2021] EWCA Civ 1835 the Court of Appeal has ruled on the test governing whether a possession order should be made at a first hearing in residential possession proceedings.

The case concerned possession proceedings issued by a property guardian company against Ms Laleva, who was living at a disused health centre in London under what was described as a temporary, non-exclusive licence.

At a first possession hearing CPR rule 55.8(2) provides that "where the claim is genuinely disputed on grounds which appear to be substantial", case management directions should be given. Ms Laleva had raised a number of defences, including that she had a tenancy rather than a licence and that the guardian agreement was a sham, but the District Judge did not consider the defences to be substantial and made a possession order. That decision was overturned on appeal by HHJ Luba QC in the High Court, which was itself appealed to the Court of Appeal.

The Court of Appeal considered the test under CPR 55.8(2), the licence/tenancy and sham arguments, as well as a technical issue as to whether Global 100 was entitled to pursue possession proceedings.

Allowing Global 100's appeal, Lewison LJ confirmed that the test for determining whether there are "substantial grounds" for defending a possession claim is the same as for summary judgment, namely whether the defendant had shown a real prospect of success. Applying that test, Lewison LJ considered there was no real prospect of Ms Laleva successfully arguing that she had a tenancy rather than a licence, as she was occupying the property for the purposes of providing guardian services pursuant to the licence agreement that she had entered into. The sham argument was dismissed for essentially the same reason, that guardian services were in fact being provided.

Lewison LJ further concluded that Global 100 was entitled to pursue possession proceedings because although it did not have a proprietary interest in the building at the time the licence was entered into, the principle of estoppel between landlord and tenant applied equally to licensor and licensee, meaning that as Ms Laleva had enjoyed the rights that the licence granted to her, she could not refute the licensor's right to recover possession pursuant to the terms of the licence.

The Court of Appeal's judgment sets down clear guidance as to when a possession order should be made at a first possession hearing, as well as upholding the enforceability in principle of property guardian arrangements involving the grant of non-exclusive licences.
 
Upgrading and sharing rights relating to Telecommunications apparatus

In On Tower UK Limited v JH & FW Green Limited [2021] EWCA Civ 1858 the Court of Appeal has clarified the position on upgrading and sharing rights imposed under the electronic communications code set out in Schedule 3A to the Communications Act 2003 (the Code).

JH & FW Green Limited, the owner of a 2,000 acre estate of mainly agricultural land, had granted a 20 year lease of a small woodland area, upon which On Tower had installed telecommunications equipment including a 22.5 metre tower, several panel and dish antennae and two equipment cabins.

On Tower gave notice dated 1 May 2019 claiming a new lease and, when the parties were not able to reach agreement by consent, applied to the Upper Tribunal for an order terminating the 1999 lease and requiring the parties to enter into a new agreement conferring code rights. On Tower sought to include unrestricted rights to upgrade and share telecommunications equipment, whereas under the previous agreement the landlord's permission was required, which was not to be unreasonably withheld.

At first instance, the Upper Tribunal ruled that the new agreement should include the terms sought by On Tower i.e unrestricted rights to install, upgrade and share. This was appealed by the landowner.

The Court of Appeal dismissed the landowner's appeal, highlighting that:

  • Although there is a requirement to have regard to an existing agreement under paragraph 34(12) of the Code, this is not the same as the test under the Landlord and Tenant Act 1954 where any departure of the terms of a business lease needs to be justified by the party seeking it. Instead "the 1954 Act and the Code have very different purposes" and "the Code cannot be said to be aiming to protect site providers in a similar way". Overall, the terms of an existing code agreement represent one factor to be considered and the weight attached to that will be based on its consistency with the aims of the Code;
  • Paragraph 17 of the Code, which provides that an operator is entitled to upgrade or share provided the apparatus has no adverse impact and no additional burden is imposed on the site provider, operates as a floor providing the minimum rights that an operator is entitled to, not the ceiling; and
  • Each application will be assessed on its own merits. In this case, the Court of Appeal agreed with the Upper Tribunal's assessment that a limit on equipment or upgrading would cause On Tower extensive difficulties and that the advance of technology created a practical need for On Tower to have upgrading and sharing rights beyond those set out in paragraph 17 of the Code.

The Court of Appeal's decision indicates yet again that decisions relating to Code rights tend to go in favour of the operators, bearing in mind that the statutory purpose of the Code is to enable the provision of telecommunications infrastructure.

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