Brophy v Vodafone (Manchester TCC, 15th March 2017)
The Electronic Communications Code gives electronic communications operators (such as Vodafone and EE) the ability to acquire rights over land belonging to others for the purpose of their electronic communications network. Operators are generally able to secure the rights they need by agreement in return for the payment of “standard” rates of consideration, so these cases rarely come before the Courts. Indeed, before March, to the best of the writer’s belief, there had been only 2 occasions since the Code was introduced in 1984 on which contested applications for such orders had come before the Court.
Mrs Brophy owns land in Cumbria. An electricity pylon sits on her land, and electricity wires run from the pylon across her land. Vodafone acquired the right, as against the electricity company, to use fibre optic cables embedded in the earth cable. It contended that it also had a right which bound Mrs Brophy to use those fibre optic cables. Mrs Brophy disagreed. Rather than argue about that, Vodafone sought to agree fresh rights with Mrs Brophy. Mrs Brophy sought a payment far in excess of the “standard” rates Vodafone was accustomed to paying, and no agreement was reached. Vodafone therefore issued an application, under paragraph 5 of the Code, for an order granting them rights over Mrs Brophy’s land and for the Court to determine the terms on which those rights would be given. The major issue was the amount of consideration payable.
Stephanie Tozer appeared for Vodafone. On 15 March 2017, judgment was handed down in the Manchester County Court. Key points to note are:
(1) The judgment confirms that an operator does not need to show that it has any present legal right over the land or the relevant equipment in order to make an application under paragraph 5;
(2) The industry standard rates were fair and reasonable consideration, since there was no special factor about Mrs Brophy’s land that made them inapplicable. The fact that Vodafone had the use of 34 fibres was not a reason to depart from the industry standard rates.
(3) Since Vodafone did not seek to argue that, in light of Bocardo SA v Star Energy [2011] 1 AC 380, the industry standard rates (which were based on Mercury Communications v LIDI (1995) 69 P & CR 135) were too high, the Judge did not determine whether Bocardohad undermined the approach in Mercury.
(4) Vodafone was not required to take an 80 year term because that is what Mrs Brophy wanted to give it (so as to justify her demand for a substantial premium). In the circumstances it was appropriate to order that the rights should last until terminated by either party on 12 months’ notice, with payments being made annually.
(5) A person against whom an order is made under paragraph 5 cannot apply for additional compensation under paragraph 16 of the Code. The financial terms were governed solely by paragraph 7. Paragraph 16 applied where (a) a person is adversely affected by rights being exercised over his neighbour’s land (but the operator has no rights over his land); and (b) a person has agreed that the operator can have rights over his land, but compensation for the impact on adjoining land owned by the same person has not been agreed.
The judgment can be found here
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