The First Tier Tribunal Property Chamber has handed down its judgement in the case of Cornerstone Telecommunications Infrastructure Limited (“CTIL”) v Firoka (Kings Cross) Limited (“Firoka”) which reinforces previous decisions in the consideration of whether a landlord has advanced sufficiently in its plans to carrying out redevelopment to be able to deprive another party from being able to carry out its own plans.
CTIL V Firoka is a telecoms case in which judgment was handed down on Monday 17th November.
CTIL, a large telecoms infrastructure company, wanted to place a new mast on the roof on the Crowne Plaza Hotel on Kings Cross Road in central London, owned by Firoka.
CTIL served a notice under paragraph 20 of the Electronic Communications Code (the “Code”) (introduced by Schedule 1 to the Digital Economy Act 2017) seeking an Order granting it the necessary rights to install the mast and electronic communications equipment.
Firoka had serious objections to the installation of a mast because the hotel’s air conditioning and heating systems were failing, and Firoka had received many complaints about them. Firoka went through a systematic and thorough examination of the issues and potential solutions and came to a decision that essential parts of the systems needed replacing. The only place where the new equipment could be placed was on the roof, in the location where CTIL wanted to place the mast.
Paragraph 21(5) of the Code says that a court cannot impose an agreement granting code rights:
“…if it thinks that the relevant person intends to redevelop all or part of the land to which the code right would relate, or any neighbouring land, and could not reasonably do so if the order were made.”
Firoka adduced considerable evidence of their intentions, including planning permissions, feasibility studies, consultants’ reports etc. to demonstrate that it had a “firm, settled and unconditional intention” to carry out the redevelopment (see Cunliffe v Goodman [1950] 2 KB 237).
Late into the case, CTIL offered to insert a “lift and shift” clause into the proposed code agreement which the parties had been negotiating, in an attempt to address Firoka’s concerns.
In turn, Firoka gave an Undertaking to the Court to commence its works of redevelopment within 9 months if no order were imposed.
The following are the important points to note from the decision:-
1. Per Cunliffe v Goodman – An “intention to redevelop” could be made out if:
“….the materials necessary to a decision on the commercial merits are available and have resulted in such a decision…..Neither project [in that case] moved out of the zone of contemplation – out of the sphere of the tentative, the provisional and the exploratory – into the valley of decision”
What wonderful words!!
2. “Intention” was a subjective test – it was up to the landowner to decide what they wanted to do, and not for the operator to come up with scenarios in which the operator’s development could proceed notwithstanding the landowner’s proposals (i.e. the lift and shift proposal).
“Once a site provider has made out its firm, settled and unconditional intention it should be free from further interference with its plans.” [Firoka para 84]
3. Firoka had a reasonable prospect of carrying out the redevelopment – it had planning permission and sufficient funds (proven by financial information provided);
4. The timescale for commencement of the redevelopment was reasonable (9 months);
5. The point in time at which the intention to redevelop was to be assessed was the date of the hearing.
6. CTIL alleged that Firoka’s solicitors, Freeths, had acted improperly by advising on the proposed redevelopment and helping Firoka push it forward after CTIL had served the paragraph 20 Notice demanding a Code Agreement. The FTT concluded, however, that Freeths had “behaved in an entirely professional manner”.
7. The Tribunal therefore refused to grant CTIL the order sought.
Either party may appeal this decision to the Upper Tribunal (Lands Chamber), subject to having first obtained leave to appeal from the First Tier Tribunal, so it may not yet be a “done deal” – watch this space!
