EE Limited & Anor v Clocktower Investments Limited

In a decision handed down on 3 June 2025 the First-tier Tribunal, Property Chamber (the FTT), struck out a notice of reference filed by the appellants seeking the renewal of Code rights under Part 5 of the Electronic Communications Code on the grounds that their existing rights were conferred by a lease to which Part II of the Landlord and Tenant Act 1954 applied. With the permission of the FTT, the appellants now appeal against that decision.

In Cornerstone Telecommunications Infrastructure Ltd v Compton Beauchamp Estates Ltd [2022] 1 WLR 3360, the Supreme Courtheld that tribunals have no jurisdiction to impose a code agreement in favour of an operator which is already in occupation of a site under a tenancy protected by the 1954 Act. If such an operator wants a new lease conferring the same code rights it must renew its existing lease under the 1954 Act and cannot rely on the more favourable terms of the Code. 

Whether a tenancy is protected by the 1954 Act turns on the application of section 23(1). This provides that Part II of the Act applies “to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied for the purposes of a business carried on by him or for those and other purposes”.

In this case the appellants do not occupy the land demised by the relevant tenancy, but they do exercise ancillary rights which it conferred, including the right to erect electronic communications apparatus on a clocktower belonging to the respondent which adjoins the land demised. The FTT decided that the appellants’ rights to erect apparatus on the respondent’s clocktower were incorporeal hereditaments (easements) which could be “occupied” and were in fact being occupied by the appellants; the property comprised in the tenancy therefore included “premises which are occupied by the tenant” and fell within Part II of the 1954 Act. The issue in the appeal is whether the FTT was right to reach that conclusion.

I am grateful to Mr Andrews-Tipler, who appeared for the appellants, and to Mr Stockill, who appeared for the respondent for their helpful submissions on this novel point.

The respondent, Clocktower Investments Ltd, is the owner of a small parcel of land adjoining a roundabout giving access to the Tunnel Estate, at Weston Avenue in Grays, Essex (the respondent may also own the remainder of the Estate, but the evidence is unclear on that). On part of the respondent’s land is a tall, three-sided clocktower which marks the entrance to the Estate. The clocktower and the land immediately adjoining it are a convenient location for electronic communications apparatus belonging to a number of telecommunications operators. Masts, antennae and dishes festoon the sides and top of the clocktower, and equipment cabinets surrounded by security fences are clustered at its base.

The structures at the base of the clocktower also include three small single-storey buildings, which were originally intended for use by telecommunications operators in connection with their apparatus on the clocktower. None of these buildings belong to the appellants and at least one of them is currently unused.

On 11 June 2004 the respondent granted a lease of part of the land at the base of the clocktower to Orange Personal Communications Services Ltd (“Orange”) for a term of years expiring on 31 May 2022 (“the Lease”). This “L” shaped area of undeveloped land is referred to in the Lease as “the Demised Premises”. It was large enough to accommodate another building of similar size to the three which had already been erected at the base of the clocktower. No such additional building existed when the Lease was granted, nor had it, or any other structure, been erected on the Demised Premises by the expiry of the Lease.

The Demised Premises were defined in Part I of Schedule 1 to the Lease by reference to drawings attached to the Lease on which they are edged in red. Within the red edging is depicted the additional building which, in the event, was never built. The drawings also show the various antennae and equipment cabinets used or intended to be used by Orange, but none of these is edged in red and the space which they occupy is not part of the Demised Premises as defined in the Lease. The land belonging to the respondent is edged in blue on the same drawings, on which are also shown the small buildings used by other operators (identified on the plan as BT, Dolphin and Vodafone).

By clause 2.1 of the Lease the respondent, as Landlord, demised all the Demised Premises together with the rights listed in Part II of Schedule 1, as follows:

I will refer to these rights enjoyed with the demise as “the paragraph 1 right”, “the paragraph 2 right”, and so on.

The “Radio Base Station” referred to in the paragraph 1 rights is defined in clause 1.1 of the Lease as:

The “Tenant's Apparatus” first referred to in the paragraph 2 right is defined as:

Schedule 2 to the Lease then lists “9 Orange antenna and 6 dish antenna equipment cabin and all necessary feeders cabling and ancillary equipment.” This does not appear to have been intended as a closed list. In particular, the definition of the Tenant’s Apparatus refers to equipment “as required from time to time”. Additionally, by clause 3.8 of the Lease, Orange agreed not to make any alterations or additions to the Tenant’s Apparatus (or to the Demised Premises) without the prior written consent of the Landlord, which was not to be unreasonably withheld or delayed. In a lease granted for a term of 20 years for use in connection with a telecommunications enterprise, the parties must be taken to have intended that the apparatus would change over time, and the definition of Tenant’s Apparatus was drafted with such changes in mind.

The “Building” mentioned in the rights is defined in the Lease as comprising the whole of the Clocktower Tunnel Estate, the extent of which is not further identified, except that it is said to include the land edged in blue on the drawings.

The drawings themselves show the Demised Premises edged in red and the Building (including the parcel of land edged in blue on which the clocktower stands. The clocktower itself is shown in elevation and in plan, and the location of the Tenant’s Apparatus is depicted. Equipment cabins are shown at the base of the clocktower on two of its three sides, while at the top of the tower the position of new PCS and dish antennae is shown. The proposed Radio Base Station occupies the Demised Premises and is shown surrounded by a fence and with a new underground cable trough running from it to the closest of the equipment cabinets.

The various covenants given by Orange as Tenant said nothing about the Radio Base Station except for clause 3.11 which prohibited the use of the Demised Premises other than as a Radio Base Station, and clause 3.15(a) which required Orange to submit and progress applications for planning permission for it. The paragraph 1 right allowed Orange to maintain, renew and replace the Radio Base Station, and the covenant at clause 3.6 required its removal at the end of the term but nothing in the Lease obliged Orange to construct it. In the event the Radio Base Station was never built. Orange made use of the rights without finding it necessary to construct the Radio Base Station, and after the Lease was assigned to the appellants in 2012 they did the same. As a result, no part of the Demised Premises was physically occupied by the appellants when the Lease expired in May 2022.

After the Lease expired there was some uncertainty about the status of the appellants’ occupation. Eventually the appellants served notices on the respondent under paragraph 33(1)(d) of the Code seeking the termination of its existing Code agreement and the grant of new Code rights under Part 5 of the Code. On 31 May 2024 they filed a notice of reference in pursuit of that claim.

By paragraph 6(2) of the transitional provisions in Schedule 2 to the Digital Economy Act 2017, Part 5 of the Code does not apply to a lease of land to which Part II of the 1954 Act applies. The validity of the notices given by the appellants therefore depends on their being able to demonstrate that at the date of their reference to the tribunal the Code agreement in respect of which the notices were given was not a lease of land to which Part II of the 1954 Act applied. It is common ground that the relevant date for consideration of whether the 1954 Act applied to the Lease was 31 May 2022, the date on which the contractual term expired, but it is also agreed that no relevant change of circumstance occurred after that date up to the time the reference was submitted.

Part II of the 1954 Act provides security of tenure for business tenants. Section 23 identifies the tenancies to which that security applies and defines the property in respect of which it is available, as follows:

By section 24(1), a tenancy to which Part II applies does not come to an end unless it is terminated in accordance with the provisions of the Act and the tenant may apply to the court for the grant of a new tenancy. Importantly, it is the tenancy in its entirety which is continued; statutory continuation is not restricted to the “holding” described in section 23(3). That is in contrast to the right of renewal. Section 32(1) provides that the new tenancy to which the tenant is entitled is to be a tenancy of the holding (unless the landlord insists on including part of the original demise which is not included in the holding). Where the current tenancy includes rights enjoyed by the tenant in connection with the holding, section 32(3) provides that those rights are to be included in the new tenancy. The new tenancy will therefore include the property comprised in the original tenancy, excluding any part which is not occupied by the tenant, and will also include rights enjoyed by the tenant in connection with that property.

By section 23(1), Part II of the Act applies only to a tenancy comprising “premises which are occupied by the tenant”, but the Act does not define what is meant by “premises”. It has been recognised, unsurprisingly, that “premises” are not limited to buildings and can include open land. More controversially, it was held by the Court of Appeal in Pointon York Group plc v Poulton [2007] 1 P & CR 115 that “premises” may include certain incorporeal hereditaments and that these may be “occupied” in the sense required for the application of section 23(1). In Pointon it was found that the premises occupied by the tenant included a right to park vehicles which was being exercised. It had previously been understood, at least since the decision of the Court of Appeal in Land Reclamation Co Ltd v Basildon District Council [1979] 1 WLR 767, a case concerning a lease of a right of way only, that an incorporeal hereditament is not such a right as is capable of being “occupied” within the meaning of the 1954 Act. In Pointon the Court of Appeal distinguished Land Reclamation and decided that some incorporeal hereditaments could be occupied in the relevant sense.

Purely contractual rights, which are not proprietary in nature, are not “premises” for the purpose of the 1954 Act. A good example is provided by In Re No. 1, Albemarle St [1959] Ch. 531, which concerned a lease of business premises which included the right for the tenant to maintain advertising signs on the outside of the buildingin which the premises were located. On the renewal of the lease a dispute arose over whether the right to use the advertising signs could be included in the new tenancy and it was held that it could, under the court’s discretionary power to determine the terms of the new letting (section 35(1)). It was not suggested by anyone that the right was itself part of the property comprised in the tenancy or that it was “premises” capable of being occupied; as Upjohn J explained, at page 539, the right was a licence to exhibit signs and no more, and it could not possibly be described as part of the demised premises.

In asking itself whether any of the rights in Part II of Schedule 1 to the Lease were premises occupied by the tenant, the Judge focused on the paragraph 2 right to erect the Tenant's Apparatus on the Building, and the paragraph 5 right to install handrails, climbing ladders etc on the Building. It was not suggested that the other rights were premises capable of being occupied. The paragraph 1 right regulates the use of the Demised Premises themselves, and has never been exercised, while the paragraphs 3 and 4 rights of access are excluded by the Court of Appeal’s decision in Land Reclamation.

The substance of the Judge’s reasoning is contained in paragraphs 18 and 19, as follows:

In case she was mistaken in thinking that it was not necessary for the purpose of section 23(1) for the rights in question to satisfy the requirements of a valid legal easement before they could amount to premises capable of being occupied, the Judge also considered the appellants’ argument that the rights did not satisfy those requirements.

To be a valid easement, there must be a dominant and a servient tenement, the right must “accommodate” the dominant tenement, which must be in different ownership from the servient tenement, and the right must be capable of being the subject matter of a grant. The Judge considered that the Demised Premises clearly qualified as a dominant tenement (irrespective of whether they comprised part of the ‘holding’ for the purposes of Part II of the 1954 Act). Alternatively, by analogy with Re Salvin’s Indenture [1938] 2 All E.R. 498, in which the combined land and incorporeal rights of a statutory water undertaker were held to be capable of being a dominant tenement accommodated by rights to lay waterpipes over land, the Judge held that “the tenant’s broader telecoms network” was the dominant tenement. Finally, the Judge rejected a submission that the rights could not be a legal easement because they were too extensive to be the subject of a grant. Mr Andrews-Tipler had argued that the presence of the appellants’ apparatus on the respondent’s land effectively deprived the respondent of the use of the servient tenement, “ousting” it from its own use of the land. The Judge held that this was not the case because the respondent was not excluded from the clocktower and remained in control of it subject to the rights granted.

Accordingly, the Judge was satisfied that the tenancy created by the Lease included premises which were occupied by the appellants for the purpose of their business, because it occupied the paragraph 2 and paragraph 5 rights, notwithstanding that it occupied no part of the Demised Premises themselves for any purpose.

On behalf of the appellants, Mr Andrews-Tipler relied on four distinct grounds of appeal.

First, he argued that the Judge erred in concluding that “premises” for the purpose of section 23(1) of the 1954 Act could include “any right, privilege, or benefit in, over, or derived from land”. As the rights in paragraphs 2 and 5 were not corporeal rights, it was necessary that they conform to one of the recognised categories of incorporeal property rights, and moreover that they be capable of occupation, before they could bring the tenancy within the scope of the 1954 Act. The only relevant incorporeal right was an easement, so the Judge should have considered whether the rights relied on created easements.

Secondly Mr Andrews-Tipler submitted that, when the Judge considered whether the rights could be easements, she erred in identifying the Demised Premises as the dominant tenement and in thinking that the rights were capable of accommodating the Demised Premises.

Thirdly, the Judge’s alternative approach which identified the dominant tenement as the whole of the tenant’s telecommunications network, was said by Mr Andrews-Tipler to be flawed and not to be supported by the authority relied on (which in any event he said ought not to be followed).

Fourthly, the equipment cabinets installed at the base of the clocktower and the fenced enclosures which surround them and from which the respondent is excluded, all of which are installed pursuant to the paragraph 2 right, were said to deprive the respondent of all use of those areas. Mr Andrews-Tipler submitted that by the application of the “ouster” principle (an aspect of the rule that an easement must be capable of being the subject of a grant), the rights are therefore too extensive to be the subject of a grant and cannot be easements.

For the respondent, Mr Stockill invited me to uphold the FTT’s decision for the reasons given by the Judge. Alternatively, he argued that the areas at the base of the clocktower which were enclosed behind the appellants’ security fence and occupied by their equipment cabinets, were additions or accretions to the Demised Premises, and that the appellants therefore occupied physical premises comprised in the tenancy.

It is convenient at this stage to refer in more detail to three relevant authorities. The earliest of these is Whitley v Stumbles [1930] AC 544, a case under Part I of the Landlord and Tenant Act 1927, which provided for the payment of compensation to business tenants at the end of their tenancy or, in certain circumstances, for the grant of a new tenancy in lieu of compensation. By section 17 of the 1927 Act the rights were conferred in respect of “any premises held under a lease… used wholly or partly for carrying on thereat any trade or business”. The case concerned hotel premises demised together with the exclusive right of fishing on an adjoining river (a profit à prendre, a type of incorporeal right). The tenant wished to renew the tenancy and the question arose whether under the 1927 Act the court could order that a new lease include the fishing rights as well as the hotel. The trial judge held that the fishing rights were not “premises” for the purpose of the Act but, that conclusion was reversed by the Court of Appeal whose decision was upheld by the House of Lords. The landlord’s argument that “premises” was limited to buildings or structures, and did not include a profit à prendre, was rejected. At (547) Viscount Hailsham held that so narrow a construction of “premises” would defeat the purpose of the Act:

In Land Reclamation Co Ltd v Basildon District Council the Court of Appeal held that a lease of a right of way was not a lease of premises capable of being occupied for the purposes of a business within the meaning of s.23(1) of the Act. It rejected the tenant’s submission that the Act should be construed as though “occupy” was synonymous with “use”. At 774-775 Buckley LJ was of the view that, both as a matter of ordinary language, and having regard to the other terms of the Act, an incorporeal right cannot be “occupied” within the meaning of the Act. At 775C-D he posited “that if the right of way were an exclusive right, the circumstances might result in the exercise of the easement amounting to occupation of the land over which it passes”. He returned to that thought at 778 A-D, concluding that it led nowhere, as follows:

Shaw LJ reached the same conclusion, for the same reasons, at 780 A-D.

Pointon York Group Plc v Poulton concerned a lease of a suite of offices which also granted the tenant the right to use certain car parking spaces in common with the landlord and its tenants of adjoining premises. The tenant sublet the offices (but not the car parking spaces) for the entire term less a three-day reversion. The sub-tenants vacated on the expiry of the underlease. During the three-day reversion, the tenant's property director oversaw decoration works and deliveries in anticipation of the firm reoccupying the offices. The tenant continued to use the car parking spaces. The landlord objected to the tenant’s application for a new tenancy on the ground that it had not been in occupation when the lease expired. The Court of Appeal considered whether the right to use the parking spaces (or the parking spaces themselves) were “premises” which could be “occupied” for the purposes of section 23(1), and, separately, whether the facts found by the trial judge amounted to occupation of the offices, and answered both questions in the tenant’s favour. Arden LJ gave the only judgment and decided the first issue on the basis that (notwithstanding the inclusion of section 32(3) in the 1954 Act) Parliament must have intended “premises” to have the same meaning as under section 17 of the Landlord and Tenant Act 1927 which was capable of including incorporeal hereditaments. She considered the use of the parking spaces by the tenant necessarily excluded the landlord and other persons with the same right and was “in effect, in relation to the parking spaces, a right to occupy”. The Land Reclamation case was not authority for the proposition that an incorporeal hereditament can never be “occupied”.

Although, at paragraph [28], Arden LJ referred to what Buckley LJ said in Land Reclamation at 775C-D that in the case of an exclusive right of way circumstances might result in the exercise of the easement amounting to “occupation of the land over which it passes”, she did not refer to the passages in the judgments of Buckley and Shaw LJJ mentioned above which emphasise that it is the right of way itself, rather than the land over which it was exercised, which needed to be “occupied”.

Nevertheless, Pointon is authority, binding on this Tribunal, that an easement may be a proprietary right which, when exercised, may be said to be “occupied” for the purpose of section 23(1). Thus, the grant of a right to use a parking space can be a grant of “premises” within the meaning of the Act.

Pointon does not establish that a tenancy which, at the relevant time, comprises land or premises which are not occupied at all for any purpose, together with incorporeal rights which are “occupied” for business purposes can be renewed under the 1954 Act. Those were not the facts of that case because the offices were also found to be occupied at the relevant time. At paragraph [25] Arden LJ suggested that where a house was let with the right to use garages, and only the garages were occupied for business purposes, it was difficult to see why the business use should not be protected, but she cannot there have been considering the position if the house was not occupied at all (so that it was not part of the “holding” in respect of which the right of renewal is available).

For my part, I find it very difficult to see how the Act could give a right of renewal in respect of a tenancy comprising both land and easements which benefit that land, if the only “premises” occupied at the relevant time are the easements. Section 32(1) allows the court to order a new tenancy of the holding and prevents the inclusion of land which is unoccupied (except at the insistence of the landlord). The court could not order a new tenancy of easements alone, without also including in that tenancy a holding capable of benefitting from them. An order purporting to grant rights entirely severed from any dominant tenement would not be an order for the grant of a tenancy at all, it would be an order for the creation of easements in gross, which is legally impossible, or for the grant of purely contractual rights, which is not within the contemplation of the Act.

The consequence of recognising the occupation of an easement as premises capable of being occupied may therefore be that while the tenancy is one to which Part II of the 1954 Act applies, capable of being continued past its contractual term date by section 24(1), there may be circumstances in which the absence of a holding for the purpose of section 32(1) makes it impossible for that tenancy to be renewed. Whether or not this paradox casts doubt on the correctness of the Court of Appeal’s decision in Pointon was not an issue on which I was addressed in argument. Pointon is binding on me, as it was on the FTT. If the right to park a car on a parking space is capable of being premises occupied within the meaning of section 23(1) of the 1954 Act, it must follow, all other things being equal, that the right to station equipment cabinets and other apparatus on land is equally capable of being “premises” which are “occupied” for the same purpose.

Section 23(1) of the 1954 Act focuses on “the property comprised in the tenancy”. As In Re No. 1, Albemarle St illustrates, the reference to property is to real property i.e. land and interests in land which may be the subject matter of a tenancy and which are legally capable of being occupied; it does not include purely personal or contractual rights such as a licence to display signs.

As the Judge recognised, property may be either corporeal (land, buildings and anything else which is fixed to and part of land) or incorporeal (intangible rights). Before the FTT it was not suggested that this case involves the occupation of corporeal property. It was common ground that the land comprised in the tenancy, the Demised Premises, was not occupied by the appellants at any relevant time. Leaving to one side Mr Stockill’s recent suggestion that the appellants had encroached on land belonging to the respondent and caused it to become part of the Demised Premises, the question for the FTT was whether paragraphs 2 and 5 had created some form of incorporeal property right which was capable of being occupied.

The appellants’ first ground of appeal challenges the FTT’s proposition that what can constitute an intangible property right in land is not restricted to the examples it gave of easements, profits and rent charges, and that an incorporeal property right can include “any right, privilege, or benefit in, over, or derived from land.” It was that proposition which the FTT relied on as making it unnecessary to consider whether the relevant rights satisfied the test for legal easements.

Mr Stockill supported the FTT’s approach and argued that, as he put it, the categories of incorporeal hereditaments are not closed.

The Judge framed the critical question in paragraph 18 of the decision as whether the rights granted under the tenancy are capable of being occupied. In putting the matter that way I do not think the Judge lost sight of the need for the rights to be proprietary in nature. That is apparent from her statement that “what can constitute an intangible property right in land” is not limited to easements, profits and rent charges.

Where I disagree with the Judge is in the assumption that the rights in paragraphs 2 and 5 could be property or premises without falling into one of the established categories of proprietary rights. As the rights were not land, as a matter of taxonomy they must either be incorporeal rights or purely contractual rights. I do not accept that there is room in the category of incorporeal property rights for new additions, as Mr Stockill suggested. The recognition of certain specific rights, including easements, profits, rentcharges, tithes and franchises as “incorporeal hereditaments” is a matter of historic classification rather than logic or the application of some overarching principle (see Megarry & Wade: Law of Real Property (10th Ed),30-001).

In the second half of paragraph 19 of the FTT’s decision, the Judge asserted that the rights in paragraph (2) and (5) are incorporeal rights capable of occupation and that they are being occupied. She did not then support that statement with any consideration of the nature of the rights themselves. It is not clear on what basis the Judge considered the rights were property rights, rather than simply contractual rights. She did explain why she considered the rights were “occupied”, namely, because “the Clocktower continues to house the claimants’ apparatus and equipment installed pursuant to those rights”. The Judge equated occupation of the rights with occupation of the respondent’s land over which the rights were being exercised and supported that analysis by referring to Pointon. But in Pointon there was no dispute that the rights to use the parking spaces in common with the landlord and its other tenants were recognised legal easements. To justify reliance on Pointon as an analogy it would first be necessary to classify the rights in paragraphs 2 and 5 as incorporeal rights i.e. property rights and to explain why they are not simply contractual rights.

The only type of incorporeal hereditament into which these rights could be fitted is the easement. No other recognised species of property right was relied on by Mr Stockill. I therefore agree with Mr Andrews-Tipler that it was essential for the FTT to be satisfied that the rights in paragraphs 2 and 5 were easements. The Judge recognised that was a possibility and went on to consider whether they were or not; her conclusion is the subject of the other grounds of appeal.

The main focus of the argument in relation to easements was on the paragraph 2 right to erect the Tenant’s Apparatus on the Building. It was not suggested by Mr Stockill that the paragraph 5 right to install handrails, ladders or connecting points for safety harnesses was a right capable of being occupied in the sense discussed in Pointon (which depended on excluding the landlord and all other persons from the space over which the right to park a vehicle was being exercised).

The Court of Appeal in In Re Ellenborough Park [1956] Ch 131 identified four characteristics which a right must possess before it can be recognised as an easement, namely that (1) there must be a dominant and a servient tenement; (2) the right must “accommodate” the dominant tenement; (3) the dominant and servient owners must be different persons; and (4) a right over land cannot amount to an easement unless it is capable of forming the subject matter of a grant. The Supreme Court confirmed these requirements in Regency Villas Title Ltd v Diamond Resorts Ltd [2019] AC 553.

Mr Andrews-Tipler submitted that the paragraph 2 right lacked the fundamental characteristic that an easement must accommodate a dominant tenement. The Judge had suggested that the rights had been “expressly granted to accommodate the proposed use of the Demised Premises for the purposes of the tenant’s business” but that was not expressly stated in the Lease and had wrongly been assumed to be the case. The applicable test was whether the right gave the dominant tenement a benefit or utility as such, thereby making it a better and more convenient property, and improving its utility: Regency Villas at [36] and [58]. Alternatively, the test formulated in Re Ellenborough Park at 170 was whether the right:

Mr Andrews-Tipler submitted that a right to station electronic communications apparatus near the Demised Premises for the benefit of customers outside the Demised Premises was an advantage to only a very discrete class of person who might use the dominant land in a very particular way. There was no necessary or ordinary connection between the rights and the Demised Premises as was emphasised by the fact that the Radio Base Station had never been developed yet the rights had been exercised entirely independently of the Demised Premises. Far from the rights serving the ordinary use and enjoyment of the Demised Premises, the relationship was reversed, and the Demised Premises were intended to house a Radio Base Station to accommodate the use of the tenant’s chattels, installed on the Building in exercise of the rights.

I do not accept this part of Mr Andrews-Tipler’s argument.

The Demised Premises are let by the Lease together with the “Rights enjoyed with demise” as the heading to Part II of Schedule 1 of the Lease describes them. The definition of the Radio Base Station, which was expected to occupy almost the whole of the Demised Premises, makes the same connection when it describes the intended building as “containing equipment to be used in conjunction with the Tenant’s Apparatus for the purpose of receiving processing handling and transmitting telecommunications signals”. The Lease itself contemplates the use of the Base Station and the use of the Tenant’s Apparatus, installed pursuant to the rights, as complementary, rather than separate, activities.

The circumstance that the Base Station was never constructed does not seem to me to matter. If the rights were easements when the Lease was granted, they could not cease to be easements because the manner of their use proved to be different from the arrangement originally intended. In Regency Villas, at [41], Lord Briggs JSC referring to the requirement that the right must accommodate the “normal use” of the dominant tenement, said this:

The rights were plainly expected to be enjoyed with the Demised Premises, which were to be occupied by the Base Station constructed to house equipment used in conjunction with the apparatus installed on the Landlord’s Building. I do not see why the specialist nature of the tenant’s business should prevent the rights from accommodating the demise in its intended use as a base station. The normal use of a radio base station is to receive and transmit telecommunications signals. That use is clearly accommodated by the facility to erect antennae and other apparatus at height on an adjacent structure. That facility is of practical utility and benefit to the occupier of the base station. The fact that there may be very few potential occupiers of the base station does not seem to me to matter.

As for the suggestion that the base station was taken for the better enjoyment of the rights, rather than vice versa, and that this prevented the rights from being an easement, a similar argument was unsuccessful in Regency Villas. The rights in that case were rights granted to the occupiers of timeshare holiday units to use leisure and sporting facilities, including a golf course. It was argued that the use of the leisure facilities was the dominant purpose of the acquisition of the timeshares:

Lord Briggs JSC rejected that submission after distinguishing the Victorian authority on which it had been based, at [57]:

The same reasoning applies in this case to the relationship between the Radio Base Station and the rights. Provided the rights accommodate the use of the Demised Premises for their anticipated purpose, it is not necessary to consider which was the more important and which was subordinate.

In my judgment the FTT was right to identify the Demised Premises as the dominant tenement and to accept that the dominant tenement was sufficiently accommodated by the rights to enable them to be recognised as easements. Judging the question at the date of grant of the Lease, the Demised Premises, whose contemplated and only permitted use was as a Radio Base Station, derived a practical benefit from the rights and was of greater utility as a Radio Base Station by reason of enjoying the rights. I therefore dismiss the second ground of appeal.

In view of my acceptance of the Judge’s conclusion that the Demised Premises were the dominant tenement and were accommodated by the rights, this issue does not arise. The authority on which the Judge based her alternative conclusion, that the dominant tenement was formed by the whole of the appellants’ telecommunications network, builds significantly on the shallow foundations provided by the decision of Farwell J in Re Salvin’s Indenture [1938] 2 All E.R. 498. That authority has been doubted in Australia (Harada v Registrar of Titles [1981] VR 743) but it has been accepted in England as supportive of the proposition that the dominant tenement for an easement to lay maintain and use pipes underground could consist of the undertaking of the water company itself, ie the corporeal and incorporeal property rights on and with which the company’s business is carried on (Bate v Affinity Water Ltd [2019] EWHC 3425 (Ch)). One significant difficulty with the application of that approach to a telecommunications undertaking is that, unlike a physical network of water pipes connecting reservoirs and water treatment plants, the corporeal property comprised in the notional dominant tenement is connected only by invisible electronic signals capable of being received or passed on to almost unlimited locations. At the date of grant it would be impossible to identify the network with any confidence from a plan or physical inspection. Additionally, in practice over time an operator’s network expands or contracts, divides or is amalgamated with the networks of other operators. I very much doubt that a dominant tenement can vary with the commercial fortunes of a business undertaking, or that it would be possible to frame a grant in such a way as to limit the use of rights only to the parts of a particular operator’s network as it existed on a particular date.

As Mr Andrews-Tipler pointed out, when the Law Commission considered how Code rights could be conferred, it assumed that the law of easements could not assist because of the impossibility of identifying a dominant tenement in the ownership of the Code operator (Law Comm CP 205, 3.10, fn5). Although the Judge dealt with this issue at some length, it is not necessary for me to decide whether that assumption was correct, and I prefer not to do so in this case.

In Regency Villas the Supreme Court confirmed what had long been understood to be the law, namely that a right over land cannot amount to an easement unless it is capable of forming the subject matter of a grant. One aspect of this rule is that a right cannot be an easement if it gives the owner of the dominant tenement exclusive use of the servient tenement. This is sometimes referred to as the “ouster” principle. It was stated by HHJ Paul Baker QC in London and Blenheim Estates v Ladbroke Retail Parks Ltd [1992] 1 W.L.R. 1278 at 1288C:

The ouster principle has recently been considered in detail in this Tribunal by Mr Justice Edwin Johnson, Chamber President, in Stenner v Teignbridge District Council [2025] UKUT 204 (LC), at [37] to [66]. It is not necessary to repeat that exercise or refer to the relevant authorities in order to deal with the issue in this appeal.

Mr Andrews-Tipler submitted to the FTT that the respondent was entirely excluded from the space at the base of the clocktower which was occupied by the appellants’ cabinets pursuant to the paragraph 2 right. Not only was this space impossible for the respondent to use for any purpose of its own because of the presence of the cabinets, but these were also protected by a security fence.

The Judge rejected the appellants’ argument on this point. At paragraph 44 she pointed out that the servient land, over which the rights were exercisable, included the whole of the D shaped piece of land edged in blue on the Lease drawings (an area substantially larger than the fenced area occupied at the foot of the clocktower by the appellants’ cabinets). She did not consider the application of the ouster principle by reference to the whole of this area and looked only at the clocktower itself. Her conclusion was that the respondent still had access to and control over the clocktower sufficient to avoid any finding that the rights effectively ousted it from the servient land.

The Judge’s conclusion that the appellants did not exclude the respondent so substantially from the servient tenement that the paragraph 2 right was incapable of being an easement was based on a finding of fact about the extent of the use left to the respondent. It was a finding which was open to her on the evidence, and it is obviously one tenable view. While the respondent may not have been able to do anything in the space occupied by the equipment cabinets and their fenced enclosure at ground level, it remained in occupation of the face of the clocktower rising above the cabinets. As the photographs I was shown demonstrate, the respondent continues to use the clocktower for its own purposes, by advertising the presence of the Estate, displaying an electronic clock and, most significantly, permitting operators to position their apparatus on the face of the clocktower in the airspace directly above the cabinets. If it is right that the servient tenement comprises only the footprint occupied by the appellants’ apparatus and the airspace above it, I can see no reason to disturb the Judge’s conclusion that the respondent was not ousted from occupation to an impermissible degree.

I am also satisfied that it would have been open to the Judge to have taken a more expansive view of the servient tenement. The paragraph 2 right is exercisable over the whole of the Building, which includes the whole of the Clocktower Tunnel Estate, only part of which is shown edged in blue on the drawings attached to the Lease. The right is exercisable by erecting the Tenant’s apparatus in the position shown on the drawings “or as otherwise agreed with the Landlord (such agreement not to be unreasonably withheld or delayed)”. It is difficult to see why, as a matter of interpretation of the Lease, the whole of the area edged in blue, or even the whole of the Estate, should not be regarded as the servient tenement over which the rights could be exercised. Viewed in that way it is obvious that the respondent’s control of the servient tenement is not interfered with to a significant extent by the exercise of the rights.

I dismiss the appellants’ fourth ground of appeal.

If I was against him on the appeal, Mr Stockill invited me to uphold the Judge’s decision on an alternative ground. As I am satisfied that the Judge came to the correct conclusion it is unnecessary for me to consider Mr Stockill’s additional point in any detail. He suggested that by their occupation of the site of the equipment cabinets, the appellants had “encroached” on the property of the respondent and caused that area to become part of the demised premises. The area so incorporated was said to be capable of providing the dominant tenement for the easements and to be premises in its own right over which a new tenancy could be granted.

The principle on which Mr Stockill relied was explained by Pennycuick VC in Smirk v Lyndale Developments Ltd [1978] 1 Ch 317. I am satisfied that the principle has no application in circumstances where the tenant’s presence on the property of the landlord is referable to the grant of a right, rather than to an unsanctioned encroachment.

For the reasons I have given I am satisfied that the Judge came to the right conclusion in striking out the notice of reference. The appellants’ tenancy is one to which Part II of the 1954 Act applies and they are not entitled to seek new Code rights under Part 5 of the Code.

This is a striking conclusion if, as I have already suggested, the peculiar circumstances of this case mean that although the appellants’ tenancy is continued by the 1954 Act despite the Demised Premises being unoccupied by them for any business purpose, the Court will be unable to grant a new tenancy of any corporeal property sufficient to sustain the renewal of their incorporeal rights. Unless the facts change the appellants may have the benefit of continuation without the opportunity of renewal. That paradox is the consequence of the Court of Appeal’s decision in Pointon.