LC – 2024 – 000030 Cliffe Farm, Swythamley SK11 OSW

FTT-Property
LC – 2024 – 000030 Cliffe Farm, Swythamley SK11 OSW
LC – 2024 – 000030 Cliffe Farm, Swythamley SK11 OSW · 2024-05-15
[1]The Respondents own Cliff Farm, Swythamley, a rural hamlet on the border of Staffordshire and Cheshire. The farm is predominantly used for grazing animals and other small livestock. It is also the Respondents family home.[2]In or around 2017, the parties reached an informal, verbal agreement that the Claimant could use part of the Respondents’ land to host an electronic communications mast and install ancillary cables and equipment (the "Apparatus”). There is no real consensus as to the terms agreed save that the Respondents would provide access to a supply of electricity and the Claimant would pay something for the electricity it used. The agreed site for the mast measures approximately 3m x 3m. The intended benefit to the Respondents was that Cliffe Farm would be provided with a high-speed internet connection in perpetuity. There was an additional benefit to the local community which would also benefit from a more secure internet service.[3]The Claimant thereby secured an elevated site for its mast for no additional consideration from which it could provide internet services to the local community.[4]In the winter of 2023, a dispute arose concerning access. Access to the mast is through the farmyard and over gated farm tracks which rise steeply to the mast. Relations had been satisfactory save for a few minor incidents, with access generally taking place on notice during weekdays. A period of bad weather causing power outages appears to have triggered the need for more extensive maintenance of the Apparatus in 2023. The Respondents became concerned about the extent of access and the manner in which it was being exercised. They attempted to put in place more formal notice arrangements than had hitherto been necessary.[5]This appears to have triggered a dispute with Mr Harding that became entrenched, ultimately leading to the Claimant’s application for the imposition of Code rights. Statutory Notice and Reference[6]On 18 December 2023 the Claimant served a statutory Notice using the OFCOM prescribed form of notice for an operator seeking the imposition of a new Code rights under para 20(2) together with the imposition of Temporary Code rights under para 27(1) for maintenance of apparatus on the site.[7]This is the correct form of prescribed notice for an operator that owns Apparatus on an existing site but does not have a subsisting Code agreement.[8]The Respondents are persons who have the right to require removal of the Apparatus in accordance with para 37 or para 40(1) but have not yet sought to exercise such right. They are the appropriate recipients for the notice.[9]Under para 88 any notice given by an operator must explain the effect of the notice. The prescribed form of notice includes paragraphs that need to be completed by the operator. They are intended to set out the Code rights the operator seeks and explain the terms on which such rights will be exercised.[10]Paragraph 7 includes a standard list of Code Rights. Annexe 2 should contain all additional terms, generally by reference to an attached draft agreement. In the case of a new agreement for a mast and ancillary cables, the draft agreement is generally in the format of a lease which provides for the mast site to be demised for a term of years with ancillary easements for cables and access. In the case of Temporary Rights, shorter, bespoke terms are generally more appropriate and included either within Annexe 2 or by reference to a separate short draft agreement.[11]Paragraph 16 of the prescribed form of notice includes optional paragraphs which reflect this practice:
“16. If you agree [to confer the Code Rights on us/ to be bound by the Code Rights], [we will send you an agreement reflecting the terms set out in this notice and ask you to sign it] [we ask you to sign the agreement attached at Annex 2]. Similarly, if you agree [to confer the Temporary Code Rights on us/ to be bound by the Temporary Code Rights], we will also send you an agreement reflecting the terms set out in this notice and ask you to sign it. You would be entitled to seek independent legal advice in relation to [this/these] agreement[s].”
[12]Annexe 2 contains the following direction: [Insert description of the additional contractual terms sought or attach a draft agreement][13]The Claimant’s notice did not follow usual practice.[14]At paragraph 6 the Claimant included the general list of Code rights that appear at paragraph 7 of the prescribed form.[15]Paragraph 15 of the notice is worded as follows:
“15. If you agree to be bound by the Code Rights, we will send you an agreement reflecting the terms set out in this notice and ask you to sign it. Similarly, if you agree to be bound by the Temporary Code Rights, we will also send you an agreement reflecting the terms set out in this notice and ask you to sign it. You would be entitled to seek independent legal advice in relation these agreements.”
[16]Annexe 2 includes five ‘additional terms’. It does not include essential terms such as duration and notice periods, which are required formalities under paragraph 11 (c) and (d) of the Code. The Annexe comes nowhere near including the detailed terms and conditions usual and appropriate for an agreement imposing the sort of Code rights requested.[17]No draft agreements were attached containing the proposed terms of the para 20 permanent rights agreement, or the para 27 temporary rights agreement.[18]The day after the service of the Notice the Claimant emailed a draft wayleave agreement to the Respondents. It proposes a 20-year grant of rights for the installation and maintenance of apparatus within a 1-meter strip which follows the route of the currently installed cables connecting the mast to the network. It makes no provision for the mast or mast site or for temporary rights of maintenance.[19]The reference to the Tribunal did not include a copy of the draft wayleave agreement. One was however attached to the Claimant’s response to the strike out application.[20]There are other mistakes and deficiencies in the Notice and in the Claimant’s statement of case which it unnecessary to dwell on.[21]The statutory notice requirements are intended to ensure that every recipient knows in full what is being asked of them. The relevant occupier should be in a position to simply accept what is being requested in the Notice or refuse because the material terms of the proposed agreement(s) are clear. This is particularly important in the case of references to which regulation 3(2), Electronic Communications and Wireless Telegraphy Regulations 2011 applies, given the short period in which they must be determined.[22]In this case the Notice contains no more than a shopping list of Code rights the Claimant would like imposed. Essential details such as the duration of the agreement(s), the notice period(s) and access arrangements (clearly a major bone of contention) are all missing. Producing a draft wayleave agreement after service of the Notice, which only covers the route of the cable easement, can only have served to further confuse the situation.[23]The Respondents did not receive any terms they could meaningfully consider and there are no draft agreements before the Tribunal on which it could begin to assess the appropriateness of the terms proposed for exercise of the rights.[24]Mr Harding confirmed that he drafted the Notice without the benefit of professional advice. The Claimant is a small family company that tries to avoid unnecessary expenditure on professional fees. To his credit Mr Harding accepted that the Notice was lacking essential information. He said that he had tried to address all pertinent issues but lacked any real experience or detailed knowledge of the statutory framework and requirements. In his words he had ‘muddled through’ the reference procedure and thought it a matter of regret that the procedure was not designed to be accessible to small businesses such as his that could ill afford substantial legal fees.[25]While sympathetic to the financial constraints faced by small operators there is nothing in the Code that allows the Tribunal to validate a notice that does not substantially comply with the requirements of para 88(3). This is not a borderline case. The Notice and Reference both lack anything approaching sufficient detail of the terms on which the requested Code rights should be exercised for the Respondent to make sense of the Notice, or for the Tribunal to determine the Reference.[26]The Notice does not substantially comply with the requirements of para 88 of the Code and is therefore invalid which means the Tribunal has no jurisdiction to consider the Reference. The failure of the Claimant to particularise the terms on which it seeks to exercise the Code rights is also a ground for striking out the application on the grounds that it has no prospect of success. The Tribunal will therefore strike out the Reference pursuant to its power under Rules 9(2)(a) and 9(3)(e) of the 2013 Rules. Costs[27]I explained to Mr Harding the extent of the Tribunal’s powers under para 96 of the Code and Rule 13 of the 2013 Rules, to order costs against a party. I also explained the matters the Tribunal must have regard to which include the extent to which a party had been successful in the proceedings. Mr Harding accepted that the Respondents had been wholly successful in their strike out application and that the Claimant had not succeeded on any point. I confirmed that I would make an order that the Claimant pay the Respondents costs of the proceedings on the basis that they had been wholly successful. Given the stage of the proceedings and the level of costs claimed I also deemed it proportionate for me to go on and make a summary assessment of the Respondents costs.[28]The Respondent filed and served a statement of costs prior to the hearing which I then considered. The costs statement shows total costs of £11,626.40, comprising solicitor’s costs of £5,724.50 plus VAT; counsels’ fees of £1,600.00 plus VAT for advice and settling the Respondents statement and £2,400.00 plus VAT for preparation and attendance at the CMH.[29]Mr Harding said that the costs looked high for the amount of work carried out. The hourly rates charged were predominantly those of a Grade A fee earner at well below the guideline rates. The time spent did not appear disproportionate for the work carried out. However, the solicitors relied heavily on counsel throughout and yet charged substantial time for instructing counsel and for general case review. Much of the costs incurred on these items was not reasonably incurred given that the case was effectively run by counsel. I therefore disallowed part of the solicitor’s time spent instructing counsel and the time spent on file review. This reduced the solicitor’s overall costs by £1,579.00, leaving total assessed costs of £8,145.50 (plus VAT of £1,629.10), which I deemed to be reasonable and proportionate to the issues and the Respondents overall success. ORDER[30]The Reference under LC-2024-000030 is struck out pursuant to Rules 9(2)(a) and 9(3)(e) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013.[31]The Claimant must within 21 days of the date of this Order pay to the Respondents their costs of the proceedings which the Tribunal has summarily assessed at £8,145.50 (plus VAT of £1,629.10). Deputy Regional Judge D Barlow 15 May 2024