Latest Tribunal decision in EE v Meyrick: could the site provider establish relevant intention under paragraph 21(5) of the Code?

Although at paragraph 38 the Tribunal stated that the case law associated with section 30(1)(f) of the Landlord and Tenant Act 1954 ("LTA 1954") was not binding authority in the context of the Code, and specifically paragraph 21(5), the Tribunal then went on to say that "Paragraph 21(5) was explicitly modelled, by the Law Commission, on section 30(1)(f); the difference in wording is trivial and is dictated by its context".

The Tribunal has therefore decided to follow the decision in Franses v Cavendish even though this was a case relating to the LTA 1954 on the question of the landlord's intention to develop in relation to paragraph 21(5) arguments. Site providers wishing to rely on paragraph 21(5) – ie those who wish to redevelop the site on which the equipment is on – will therefore need to consider the two part test set out in Franses v Cavendish which can be summarised as the party having:

1. A reasonable prospect of carrying out the current scheme of redevelopment

2. A firm, settled and unconditional intention to put their current scheme into effect.

The Respondents were able to show that they met the first test, as they had the requisite resources and ability to undertake the development, but where they fell down was on the second test.

Firstly the Tribunal was critical of the evidence supplied in respect of the Respondents' intention, stating:

"Therefore on Mr Meyrick’s evidence the Respondents must have made their decisions, and formed their intention to redevelop, on the recommendation of the Estate Management Company; yet no minutes of directors’ meetings are available for that company, despite the clear requirements of the Companies Act 2006, section 248. And while the Respondents themselves have no obligation under the Companies Act 2006, if the evidence given for them is that they act on the recommendation of the management company, it is surprising that there is no record of those recommendations. On that basis alone it is arguable that the Respondent's case could fail. There is no evidence that the Respondents themselves have any intention to do anything nor that the Estate Management Company have recommended any course of action."

Secondly the Tribunal was not prepared to accept that the Respondents intended to put into effect the development as they considered that it was put together in response to the application for Code rights and in order to prevent the obtaining of those Code rights. The Tribunal therefore considered that the intention was conditional but also not a serious intention.

This should act as a warning to site providers who are wishing to redevelop property on which electronic communications equipment is situated. Landowners should ensure that they can evidence a firm and settled intention as at the date of the hearing in order to satisfy paragraph 21(5) of the Code. It is unlikely that any development that is designed purely to frustrate an operator from exercising Code Rights is likely to succeed.

There has been a lot of discussion post Franses v Cavendish about how to deal with the question of intention to develop in circumstances where the development also has the fortuitous effect of removing the tenant and we would expect to see this issue tested further. The other matter that might bear further scrutiny is the approach taken by the operator with regards to refusing to use the proposed mast. The operator stated that they were unlikely to want to use a mast owned by an unregulated party but there are plenty of parties that are unregulated and provide infrastructure which is used by operators. This approach will impact on those infrastructure providers that are currently unregulated. This approach also does not chime with some other Landlord and Tenant 1954 Act decisions and we expect this to be explored further.

Therefore on Mr Meyrick’s evidence the Respondents must have made their decisions, and formed their intention to redevelop, on the recommendation of the Estate Management Company; yet no minutes of directors’ meetings are available for that company, despite the clear requirements of the Companies Act 2006, section 248. And while the Respondents themselves have no obligation under the Companies Act 2006, if the evidence given for them is that they act on the recommendation of the management company, it is surprising that there is no record of those recommendations. On that basis alone it is arguable that the Respondent's case could fail. There is no evidence that the Respondents themselves have any intention to do anything nor that the Estate Management Company have recommended any course of action.

https://www.bailii.org/uk/cases/UKUT/LC/2019/164.html