BREAKING NEWS: Court of Appeal upholds Upper Tribunal decision in CTIL v Compton Beauchamp Estates Limited

Accordingly the Upper Tribunal did not have jurisdiction to require a freeholder who was not in occupation of land to confer rights pursuant to the Code on an operator in circumstances where the operator was seeking the imposition of those rights direct between the freeholder and the operator.  

However, the Court agreed with the Upper Tribunal that there did not appear to be any impediment to the operators entering into an agreement between themselves; and then seeking the freeholder's agreement to be bound by it.  If the freeholder refused to be bound by the agreement then it was open to the operator to serve notice pursuant to paragraph 20 of the Code seeking to bind the freeholder to the terms of the agreement; and seeking the conferral of code rights by the freeholder in respect of those rights which affect land for which the freeholder is the occupier.  In the judgment, the Court also confirmed that this did not cause a problem with renewals of an agreement as this was catered for by paragraph 33 of the Code.

 What does this mean going forwards?

We expect the decision of the Court of Appeal to have far-reaching consequences.  We expect the decision to impact on a large number of agreements that operators are currently seeking to replace by following the procedure in paragraph 20 of the Code.  In many cases, operators have preferred to serve paragraph 20 notices in respect of existing sites rather than follow the process for renewal in paragraph 33 of the Code or in accordance with the Landlord and Tenant Act 1954 where that Act applies.   

Based on this judgment, this was the wrong process to follow.  The process in paragraph 33 of the Code does not suffer from the difficulties in relation to who the occupier is as it allows for the notice to be served on a "site provider".  We therefore expect a large number of cases to fall away on the basis that the operator has been using the wrong process to obtain a new or modified agreement in respect of an existing site.  We also expect operators who have been occupying land in accordance with agreements protected by the Landlord and Tenant Act 1954  prior to the introduction of the new Code to now be required to follow the process for renewal contained in that Act rather than the Code.  

It follows that in the case of the renewal of code rights it is not necessary for the person who confers the new (or modified) code rights to be an occupier. In the event of failure to agree or disagreement the operator may apply to the UT under paragraph 34 of the Code. Accordingly, in many cases an application by an operator in situ need not be made under paragraph 20; but may be made under paragraph 34.