Lands Tribunal for Scotland

OPINION

British Telecommunications plc (Applicants)
v
Peter Morrison (Respondent)

Land at 78 North Shawbost, Isle of Lewis HS2 9BQ

Introduction

1. The applicants are operators under the 2017 Electronic Communications Code, set out in Schedule 3A to the Communications Act 2003. The respondent owns land at 78 North Shawbost, Isle of Lewis. The applicants have installed apparatus there. There is no agreement by the respondent in respect of the installation of the apparatus. The applicants accept that one of the items, namely a cabinet providing a fibre broadband service, was installed in error. They wish to remove it. The respondent has in fact served two notices upon the applicants seeking the removal of apparatus from his land. However, the respondent has denied access to the site for the applicants so they cannot remove the cabinet, on the basis that he has a lien over the equipment in respect of a claim for damages.

2. In these circumstances the applicants have served notice and made corresponding application under paragraph 26 of the Code for interim code rights. The applicants seek limited rights to enable them to take access to the respondent’s site and carry out works to remove the cabinet and re-instate the land. The respondent has declined to enter into the agreement proposed by the notice and opposes the application for interim code rights.

Procedure

3. We held a summary hearing on 21 July 2020. Parties had lodged documents and notes of argument. The applicants lodged an affidavit by a Mr Sherra who is a regional programme manager for the applicants covering the Isle of Lewis. The respondent lodged an affidavit for his own evidence. The applicants were represented by Mr Timothy Young, advocate and the respondent was represented by Mr Simon Crabb, advocate.

4. We raised preliminary matters including whether the para. 26 notice seeking interim rights ought to have included a proposed term as to the payment of a consideration, which it did not do. Our concern was whether we could grant an order under para. 26(3) of the Code if the notice had not complied with para. 20(2). A notice under para. 20(2) for full code rights requires to set out all the terms which an operator seeks, and under para. 23(3) the agreement imposed “must” include terms as to payment of consideration. It was pointed out however that sub-para. 26(4) and (6)(b) in applying para. 23 to orders for interim rights, the “duty” under para. 23 had been downgraded to a “power” to include such a term. Accordingly whatever the position may be for applications for full code rights, we do not think it can be said that as a matter of implication, a notice for the purposes of interim code rights under para. 26 requires to state a term as to the payment of a consideration. We are therefore satisfied that we are not prevented from making the order sought. The respondent had not raised the point in his written submissions, and although proceeded to submit that a reasonable observer was entitled to be informed as to a proposed consideration, counsel pointed to no provision in the Code requiring this to be the case.

Legislation

Digital Economy Act 2017

Schedule 1, inserting Schedule 3A to the Communications Act 2003, headed “The Electronic Communications Code,” in force from 28 December 2017, (herein referred to as the “Code” or “the new Code”) provides:

…12 Exercise of code rights

(1) A code right is exercisable only in accordance with the terms subject to which it is conferred.

(2) Anything done by an operator in the exercise of a code right conferred under this Part in relation to any land is to be treated as done in the exercise of a statutory power.

(3) Sub-paragraph (2) does not apply against a person who—

(a) is the owner of the (land) or the lessee of the land, and

(b) is not for the time being bound by the code right.

20 When can the court impose an agreement?

(1) This paragraph applies where the operator requires a person (a “relevant person”) to agree—

(a) to confer a code right on the operator, or

(b) to be otherwise bound by a code right which is exercisable by the operator.

(2) The operator may give the relevant person a notice in writing—

(a) setting out the code right, and all of the other terms of the agreement that the operator seeks, and

(b) stating that the operator seeks the person's agreement to those terms.

(3) The operator may apply to the court for an order under this paragraph if—

(a) the relevant person does not, before the end of 28 days beginning with the day on which the notice is given, agree to confer or be otherwise bound by the code right, or

(b) at any time after the notice is given, the relevant person gives notice in writing to the operator that the person does not agree to confer or be otherwise bound by the code right.

(4) An order under this paragraph is one which imposes on the operator and the relevant person an agreement between them which—

(a) confers the code right on the operator, or

(b) provides for the code right to bind the relevant person.

21 What is the test to be applied by the court?

(1) Subject to sub-paragraph (5), the court may make an order under paragraph 20 if (and only if) the court thinks that both of the following conditions are met.

(2) The first condition is that the prejudice caused to the relevant person by the order is capable of being adequately compensated by money.

(3) The second condition is that the public benefit likely to result from the making of the order outweighs the prejudice to the relevant person.

(4) In deciding whether the second condition is met, the court must have regard to the public interest in access to a choice of high quality electronic communications services.

(5) The court may not make an order under paragraph 20 if it thinks that the relevant person intends to redevelop all or part of the land to which the code right would relate, or any neighbouring land, and could not reasonably do so if the order were made.

23 What are the terms of an agreement imposed under paragraph 20?

(1) An order under paragraph 20 may impose an agreement which gives effect to the code right sought by the operator with such modifications as the court thinks appropriate.

(2) An order under paragraph 20 must require the agreement to contain such terms as the court thinks appropriate, subject to sub-paragraphs (3) to (8).

(3) The terms of the agreement must include terms as to the payment of consideration by the operator to the relevant person for the relevant person's agreement to confer or be bound by the code right (as the case may be).

(4) Paragraph 24 makes provision about the determination of consideration under sub-paragraph (3).

(5) The terms of the agreement must include the terms the court thinks appropriate for ensuring that the least possible loss and damage is caused by the exercise of the code right to persons who—

(a) occupy the land in question,

(b) own interests in that land, or

(c) are from time to time on that land.

24 How is consideration to be determined under paragraph 23?

(1) The amount of consideration payable by an operator to a relevant person under an agreement imposed by an order under paragraph 20 must be an amount or amounts representing the market value of the relevant person's agreement to confer or be bound by the code right (as the case may be).

(2) For this purpose the market value of a person's agreement to confer or be bound by a code right is, subject to sub-paragraph (3), the amount that, at the date the market value is assessed, a willing buyer would pay a willing seller for the agreement—

(a) in a transaction at arm's length,

(b) on the basis that the buyer and seller were acting prudently and with full knowledge of the transaction, and

(c) on the basis that the transaction was subject to the other provisions of the agreement imposed by the order under paragraph 20.

(3) The market value must be assessed on these assumptions—

(a) that the right that the transaction relates to does not relate to the provision or use of an electronic communications network;

25 What rights to the payment of compensation are there?

(1) If the court makes an order under paragraph 20 the court may also order the operator to pay compensation to the relevant person for any loss or damage that has been sustained or will be sustained by that person as a result of the exercise of the code right to which the order relates.

(2) An order under sub-paragraph (1) may be made—

(a) at the time the court makes an order under paragraph 20, or

(b) at any time afterwards, on the application of the relevant person.

(6) Paragraph 84 makes further provision about compensation in the case of an order under paragraph 20.

26 Interim code rights

(1) An operator may apply to the court for an order which imposes on the operator and a person, on an interim basis, an agreement between them which—

(a) confers a code right on the operator, or

(b) provides for a code right to bind that person.

(2) An order under this paragraph imposes an agreement on the operator and a person on an interim basis if it provides for them to be bound by the agreement—

(a) for the period specified in the order, or

(b) until the occurrence of an event specified in the order.

(3) The court may make an order under this paragraph if (and only if) the operator has given the person mentioned in sub-paragraph (1) a notice which complies with paragraph 20(2) stating that an agreement is sought on an interim basis and—

(a) the operator and that person have agreed to the making of the order and the terms of the agreement imposed by it, or

(b) the court thinks that there is a good arguable case that the test in paragraph 21 for the making of an order under paragraph 20 is met.

(4) Subject to sub-paragraphs (5) and (6), the following provisions apply in relation to an order under this paragraph and an agreement imposed by it as they apply in relation to an order under paragraph 20 and an agreement imposed by it—

(a) paragraph 20(3) (time at which operator may apply for agreement to be imposed);

(b) paragraph 22 (effect of agreement imposed under paragraph 20);

(c) paragraph 23 (terms of agreement imposed under paragraph 20);

(d) paragraph 24 (payment of consideration);

(e) paragraph 25 (payment of compensation);

(f) paragraph 84 (compensation where agreement imposed).

(6) Paragraphs 23, 24 and 25 apply by virtue of sub-paragraph (4) as if—

(a) references to the relevant person were to the person mentioned in sub-paragraph (1) of this paragraph, and

(b) the duty in paragraph 23 to include terms as to the payment of consideration to that person in an agreement were a power to do so.

(7) Sub-paragraph (8) applies if—

(a) an order has been made under this paragraph imposing an agreement relating to a code right on an operator and a person in respect of any land, and

(b) the period specified under sub-paragraph (2)(a) has expired or, as the case may be, the event specified under sub-paragraph (2)(b) has occurred without (in either case) an agreement relating to the code right having been imposed on the person by order under paragraph 20.

(8) From the time when the period expires or the event occurs, that person has the right, subject to and in accordance with Part 6 of this code, to require the operator to remove any electronic communications apparatus placed on the land under the agreement imposed under this paragraph.

40 How does a landowner or occupier enforce removal of apparatus?

(1) The right of a landowner or occupier to require the removal of electronic communications apparatus on, under or over land, under paragraph 37 or 38, is exercisable only in accordance with this paragraph.

(2) The landowner or occupier may give a notice to the operator whose apparatus it is requiring the operator—

(a) to remove the apparatus, and

(b) to restore the land to its condition before the apparatus was placed on, under or over the land.

(3) The notice must—

(a) comply with paragraph 89 (notices given by persons other than operators), and

(b) specify the period within which the operator must complete the works.

(4) The period specified under sub-paragraph (3) must be a reasonable one.

(5) Sub-paragraph (6) applies if, within the period of 28 days beginning with the day on which the notice was given, the landowner or occupier and the operator do not reach agreement on any of the following matters—

(a) that the operator will remove the apparatus;

(b) that the operator will restore the land to its condition before the apparatus was placed on, under or over the land;

(c) the time at which or period within which the apparatus will be removed;

(d) the time at which or period within which the land will be restored.

(6) The landowner or occupier may make an application to the court for—

(a) an order under paragraph 44(1) (order requiring operator to remove apparatus etc), or

(b) an order under paragraph 44(3) (order enabling landowner to sell apparatus etc).

(7) If the court makes an order under paragraph 44(1), but the operator does not comply with the agreement imposed on the operator and the landowner or occupier by virtue of paragraph 44(7), the landowner or occupier may make an application to the court for an order under paragraph 44(3).

(8) On an application under sub-paragraph (6) or (7) the court may not make an order in relation to apparatus if an application under paragraph 20(3) has been made in relation to the apparatus and has not been determined.

44 What orders may the court make on an application under paragraphs 40 to 43?

(1) An order under this sub-paragraph is an order that the operator must, within the period specified in the order—

(a) remove the electronic communications apparatus, and

(b) restore the land to its condition before the apparatus was placed on, under or over the land.

(2) An order under this sub-paragraph is an order that the operator must, within the period specified in the order, restore the land to its condition before the code right was exercised.

(3) An order under this sub-paragraph is an order that the landowner, occupier or third party may do any of the following—

(a) remove or arrange the removal of the electronic communications apparatus;

(b) sell any apparatus so removed;

(c) recover the costs of any action under paragraph (a) or (b) from the operator;

(d) recover from the operator the costs of restoring the land to its condition before the apparatus was placed on, under or over the land;

(e) retain the proceeds of sale of the apparatus to the extent that these do not exceed the costs incurred by the landowner, occupier or third party as mentioned in paragraph (c) or (d).

(4) An order under this sub-paragraph is an order that the landowner may recover from the operator the costs of restoring the land to its condition before the code right was exercised.

(5) An order under this paragraph on an application under paragraph 40 may require the operator to pay compensation to the landowner for any loss or damage suffered by the landowner as a result of the presence of the apparatus on the land during the period when the landowner had the right to require the removal of the apparatus from the land but was not able to exercise that right.

(6) Paragraph 84 makes further provision about compensation under sub-paragraph (5).

(7) An order under sub-paragraph (1) or (2) takes effect as an agreement between the operator and the landowner, occupier or third party that—

(a) requires the operator to take the steps specified in the order, and

(b) otherwise contains such terms as the court may so specify.”

Schedule 2 to the 2017 Act contains transitional provisions.

Telecommunications Act 1984

Schedule 2 entitled “The Telecommunications Code” (herein referred to as “the old Code”).

Cases

Black v. Carmichael 1992 SLT 897.
Air and General Finance Limited v. RYB Marine Limited [2007] CSOH 177.
Wilmington Trust Company & ors v. Rolls Royce Plc [2011] CSOH 151.
Elite Embroidery v Virgin Media Ltd [2018] UKUT 364 (LC)
Cornerstone Telecommunications Infrastructure Limited (CTIL) v Compton Beauchamp Estates Ltd [2019] UKUT 107 (LC)
Cornerstone Telecommunications Infrastructure Limited (CTIL) v. University of London [2020]1 WLR 2124.
Arqiva Limited v. Kingsbeck Limited, 21 May 2020, LTS/ECC/2019/005

Textbooks etc.

G J Bell, Principles of the Law of Scotland (4th ed, 1839) at § 1413, and 1431–1432.
McBryde, The Law of Contract in Scotland (3rd ed, 2007) at para. 20-74
Gloag and Henderson, The Law of Scotland (14th ed, 2017) at paras. 34.13, 34.15, 36.16, 36.19, 36.26
Steven, Pledge and Lien, (2008) para. 11.33 and 11.34
Falcon Chambers, The Electronic Communications Code and Property Law, Practice and Procedure, para 30.4.3

Report

Law Commission, The Electronic Communications Code (Law Com No 336, 27 February 2013) at paras.1.43–1.44, 2.57, 2.80, 4.18–4.21, 5.16, 5.78–5.82, 5.98, 5.109, 5.111–5.115, 6.15, 6.42, 6.78, 6.121–6.130, 9.48–9.54 and 9.61–9.63.

Background facts and circumstances

5. The applicants’ apparatus is shown on a plan attached to a notice of 20 March 2020 from the applicants to the respondent. It is situated on land belonging to the respondent. The notice seeks an agreement failing which the imposition of interim code rights under para. 26 of the Code. It is no less than the fourth of a series of notices involving the parties.

6. The apparatus is described in Annex 1 to the notice as one green DSLAM cabinet, one pole and associated wiring, 47 metres of underground duct and cable (Category B), one joint box and 8 metres of duct and cable (Category A). Counsel for the applicants explained that the pole and two sections of duct and cable totalling 47m had, he understood, been on site for decades, and comprised telephone lines for surrounding properties. What was new was the cabinet and, we understood, associated duct and cable. Counsel accepted that there was no apparent right for the cabinet to be there but required an order in wide enough terms in case the removal works required access to other elements of the apparatus. We understood that the 8m of duct and cable associated with the cabinet would also be removed or diverted from the land. Counsel was not in a position to concede that there was no right to keep the other apparatus installed on site, since he maintained it was possible rights existed under a legal mechanism other than one requiring the respondent’s express agreement. Thus the applicants had not brought an application for full rights under para. 20, although they had previously served a para. 20 notice.

7. The respondent’s affidavit indicates that the plan omits an underground chamber which has also been installed on the land. This he says has been installed on the footprint of a proposed building. Applicants’ counsel could not exclude the possibility of the existence of such an underground chamber. However the work to remove the cabinet had been planned on the basis of the infrastructure known to the applicants on the plan, and it was not the intention to remove any such chamber. It was not covered by the notice and code rights were not sought for it.

8. The respondent has owned the ground since 1988. In February 2011 he obtained planning permission for a mixed use development there, comprising tourist accommodation, retail units and a restaurant. It would appear that the permission lapsed at some point, although the respondent explains in his affidavit that he continued to proceed with the proposed development in seeking to address the various planning conditions.

9. In February 2017 the respondent became aware that the applicants had installed apparatus on the ground. He attempted to resolve the situation. There followed lengthy and inconclusive correspondence with different employees and departments of the applicants. The respondent’s position was that the site’s development potential was being blighted by the apparatus. The correspondence indicates that he sought for the applicants to remove their equipment or else to pay compensation. The discussions did not progress well, partly because a proposed wayleave agreement in October 2017 failed to include the underground chamber located within the footprint of the proposed building. Progress stalled on this issue. It would appear that by about November 2017 the respondent installed security fencing around the site preventing access until the matter was resolved. The applicants offered compensation in January 2018, but was not accepted.

10. The respondent obtained a valuation report in June 2018 and in negotiations sought a substantial capital sum of plus annual rental to be reviewed on a three-yearly basis. This proposal was not accepted by the applicants.

11. The applicants issued a notice under paragraphs 20(2) and 27(1) of the Code on 20 July 2018. Full code rights were sought, and a one off payment was proposed. On 15 August 2018 the respondent issued a notice to the applicants purportedly under para. 41(2) of the Code, seeking removal of apparatus installed without his consent. On 6 September 2018 the applicants conceded that they were at fault for not entering into a written agreement with the respondent in advance of installation of apparatus, although the relevant letter is unspecific as to which component or components of apparatus they refer. A further notice was issued by the respondent to the applicants on 27 November 2019. This time the notice referred to para. 40(2) of the Code, again seeking removal of the apparatus stating that the respondent had never been bound by a code right entitling the applicant to keep apparatus on his land.

12. The applicants then adopted the position that as they were unable to reach a compromise they would require to remove certain of the apparatus from the respondent’s land. At this point, according to an email of 2 December 2019, the applicants were prevented by the respondent from carrying on the removal work. The applicants indicate in an email of 4 February 2020 that they were still prepared to deal with the issue of compensation, but that they required to complete relocation of equipment and remedial works.

13. Accordingly the fourth notice came into play, namely, the notice by the applicants upon the respondent dated 20 March 2020 seeking interim code rights under para. 26(3) of the Code. This was expressly in order to allow them to remove the green DSLAM cabinet from the respondent’s land. This is the notice underlying the current application.

14. Paragraph 8 of the notice as to duration of the proposed agreement is poorly worded but counsel explained that the applicants sought the rights for a maximum period of three months or until the earlier completion of removal of the cabinet and associated works and reinstatement of the land, whichever period being the shortest. The notice seeks agreement within 28 days. This period has expired without agreement, and accordingly the applicants have applied for agreement to be imposed in terms of para. 26(3) of the Code.

15. In support of their position the applicants have produced Mr Sherra’s affidavit. In summary the applicants need access to the apparatus in order to allow diversion of broadband services from the existing cabinet to a new cabinet situated on other land. If the applicants are able to divert their services to the new cabinet it will allow up to 72 customers to access the fibre broadband network. There are currently 28 customers, but the applicants have had to stop taking orders from additional customers because they are unable to access the existing apparatus. It also means that if any of the 28 customers’ circuits develop a fault, located in the cabinet, the applicants will be unable to fix it. If the applicants are able to access their existing cabinet on the respondent’s land, the existing 28 customers will retain service and the applicants can accept new orders from potentially 44 new customers. Mr Sherra estimates that the necessary work will take up to nine days on site, and that the applicants can be flexible as to mutually convenient dates for the work.

Respondent’s submission

16. It is convenient that we deal first with the respondent’s submission. It was submitted that the apparatus had been unlawfully on the respondent’s land since at least February 2017. His evidence did not distinguish between the various pieces of equipment, except for the underground chamber. There was no written agreement between the applicants and the respondent for the apparatus to be situated upon his land either in terms of the new code or the old code. The transitional provisions of the 2017 Act did not apply.

17. It followed that the applicants’ apparatus had unlawfully encroached upon the respondent’s land. The applicant had a claim for violent profits and for damages for the delict of unlawful encroachment. The respondent had a lien until the applicant agreed to make appropriate reparation. Reference was made to Steven, Pledge and Lien paras 11.33 and 11.34.

18. The encroachment had occurred prior to the new Code coming into force on 28 December 2017. Para. 12 of the Code meant that where there was no Code agreement in existence, the operator did not have protection from common law claims.

19. Turning to the test set out in para. 26(3) referring to para. 21 it was submitted under sub-para. 21(2) that the prejudice caused to the respondent was not capable of being adequately compensated by money and in terms of sub-para. (3) the public interest did not outweigh the prejudice to the respondent. We should point out that although the respondent’s submission drew attention to sub-para. (5), i.e. that the court may not make an order if it thinks that the relevant person intends to redevelop all or part of the land to which the Code right would relate, and could not reasonably do so if the order were made, the respondent did not found upon this provision.

20. It was the respondent’s position that the terms of the Code relating to compensation did not apply to the type of compensation which he sought at common law. Reference was made to para. 25(1) referring to compensation for “any loss or damage that has been sustained or will be sustained … as a result of the exercise of the Code right to which the order relates”(emphasis added). That wording made it clear that statutory compensation had to relate to the Code right to be exercised. However the damage sustained in this case had already been incurred from an encroachment on or before February 2017, thus there was no connection between the loss sustained and the exercise of the power sought. He would suffer prejudice because he would not be adequately compensated according to his common law rights. The respondent would be deprived of his lien over the apparatus should the order be made. He would therefore lose rights by the interim order, for which there would be inadequate compensation.

21. In terms of paras. 21(3) and (4) it was accepted that there was a public interest in the access to high quality electronic communication services. However this did not outweigh the prejudice to the respondent. The respondent had had a real urgency in resolving the matter in 2017 and took significant steps to do so, as referred to in his affidavit. The applicants had however repeatedly failed to engage with him.

22. It was also submitted that the Tribunal should bear in mind the principle that no person should be deprived of his land against his will unless expressly authorised by Parliament: see CTIL v Compton Beauchamp at para 87. Furthermore there was no power under the old code to order interim rights, which had resulted in further prejudice to the respondent.

Applicants’ submissions

23. It was accepted that all the apparatus had been installed prior to 15 February 2017 at the latest, albeit that the actual dates for the various elements was not presently known. This meant that at the time when the apparatus was installed, matters would have been governed by the old code. It was accepted that the cabinet had been erroneously installed on the land and there were no code rights in respect of this element of the apparatus. The applicants had served the notice under para. 26(3) and there was no suggestion from the respondent that the formal requirements of para. 26(3) had not been complied with. It was submitted that the applicants had a “good arguable case” in terms of para. 26(3)(b) that the test in para. 21 is met.

24. There was limited scope for bringing into account various common law principles which did not appear in the statutory code. It was plainly the case that any prejudice caused to the respondent was capable of being adequately compensated by money. If the code restricted the possibility of common law claims for damages, that was a consequence of the statutory scheme. But if the code did not do so, then the granting of the order would not prejudice any common law claim. It was suggested that there would be very few types of prejudice which could not be adequately compensated by money in the sense of para. 21(2).

25. It was submitted that the public benefit outweighed any prejudice to the respondent in terms of sub-paras (3) and (4) of para. 21. Reference was made to Mr Sherra’s affidavit. Remote communities such as the present had a particular need for the services being denied to them.

26. The applicants highlighted the contradiction in the respondent’s position in having demanded the apparatus be removed in terms of two statutory notices, but now seeking to prevent the removal of the cabinet. The prejudice claimed by the respondent had not been identified.

27. It was submitted that the respondent’s grounds of opposition were misconceived and could only be explained by an attempt to maintain a tactical bargaining position. The Code had been designed to prevent operators being held to ransom by landowners. The Code had been designed to impose agreement where apparatus had been mistakenly installed on land where there was no pre-existing agreement. The width of para. 26 providing for interim code rights had been recognised in CTIL v University of London at para. 78.

28. It was further submitted that the Code applied irrespective of when the apparatus was installed. Schedule 2 to the 2017 Act contained detailed transitional provisions. The applicants could have made a claim under the old code via the then para. 21 and sought compensation under the then para. 7(3). The new code did not interfere with any accrued rights for compensation under the old code: the repeal of the old code was without prejudice to any accrued right to compensation under it: Elite Embrodiery v Virgin Media Ltd para 21. It was difficult to see how a common law claim for damages could continue to exist. However if the continuing existence of a common law claim for damages did exist, there was no basis for suggesting that this was relevant to the issue of whether the court should impose interim code rights. In any event the rights to consideration and compensation in the new code were in wide terms.

29. It was submitted that the lien asserted in the pleadings was inconsistent with the respondent’s proposition that the code did not apply. The lien was not recognised under Scots law and was irrelevant to para. 26. The lien was merely a right of security held by the possessor of moveable property. At common law the property would no longer be regarded as moveable on account of accession to the land, but under the Code accession was prevented by operation of para. 101. Under reference to National Homecare Ltd v Belling & Co Ltd, Wilmington Trust Co v Rolls Royce plc and Ayr and General Finance Ltd v RYB Marine Ltd it was submitted that the lien contended for did not fall into any of the categories recognised by Scots law. Furthermore the case comes perilously close to the situation in Carmichael v Black. There the act of a landowner clamping a motor vehicle situated on his private property without permission was held to fall within the proper limits of the crime of extortion, where the purpose of the wheel clamping was to obtain money as a condition of the release of the vehicle. In any event, even if there was a lien, para. 26 of the Code authorised interference with a landowner’s rights.

30. The applicants remained ready and willing to engage in constructive dialogue with the respondent as to the level of any compensation or consideration that might be due, which position could be seen in the correspondence. However they could not commit in advance to reach agreement and were therefore entitled to test the respondent’s claims.

Consideration by Tribunal

31. The applicants have come to the Tribunal solely for the purpose of seeking to remove their cabinet and any associated equipment from the respondent’s land, thus to allow the diversion of fibre broadband services to another cabinet situated elsewhere. For this they seek interim code rights. At first glance it may seem odd that an applicant should seek “interim” rights for what is, as it were, a one-off event. However the Court of Appeal have examined the language of the Code in CTIL v University of London and clarified that an interim right might be used for a one-off event, such that there is no need for the para. 26 application necessarily to be accompanied by a para. 20 application for full rights: passages at 78-82. In other words a para. 26 application may be free standing, and the fact there is no accompanying application under para. 20 is of no moment in this case.

32. The failure in negotiations between parties has led to a position which is as unfortunate as it is bizarre. The respondent has served two notices upon the applicants seeking removal of the apparatus. The applicants have sought to remove the item of equipment which they concede should be removed, namely the cabinet, but have been unable to do so since the respondent blocks access to his land. He maintains he has a common law right of damages for wrongful encroachment, amongst others. As put in answer 3 of his pleadings “…the respondent insists on the lien until the applicant agrees to make appropriate reparation.” Thus there is stalemate, and in the meantime we infer that the residents of the area have access only to a limited broadband service.

33. It is not necessary for us to deal with all the applicants’ arguments. We would emphasise the wording in the first part of the test under para. 21(2), referred to under para. 26(3)(b), that “the prejudice caused to the (respondent) by the order is capable of being adequately compensated by money.” What the applicants seek is an interim right to remove an item of their property and to go on the land for this purpose, including certain diversionary work. If the applicant does have a pre-existing common law claim for damages, and if this has survived the parallel existence of code rights introduced by statute, we are unable to see how this right could be lost by the imposition of code rights in the form of an order. Apart from the possible lien we discuss below, no link was suggested whereby a pre-existing claim, if valid, would be lost by the removal by the applicants of the offending apparatus.

34. The debate did not directly confront the issue whether a pre-existing damages claim could exist alongside the Code, although the applicants indicated that this would appear unlikely. In the light of our view on other parts of the case it is not necessary for us to examine this point. We would also prefer not to express a view on such a claim since we do not have jurisdiction to determine compensation other than under the new Code. However, if the respondent has served a valid notice under para. 40 or 41 of the Code, which has not been complied with, he would have a statutory remedy in the form of being able to apply for an order under para. 44 for removal of the apparatus. Sub-para. (5) refers to compensation to the landowner for any loss or damage suffered by the landowner as a result of the presence of the apparatus on the land during the period when the landowner had the right to require the removal of the apparatus from the land, but was not able to exercise that right. Para. 44 also provides for an order for sale of apparatus and for the proceeds to be retained to cover certain specified costs such as removal and restoration of the land. We note that para. 21 of the old code also had a removal procedure available to a landowner which, under para. 7(3), could result in compensation being payable. We mention these provisions to point out that for the period before and after the introduction of the new Code, the respondent was not without a statutory remedy. We would have considered that the availability of a remedy requires to be taken into account in assessing the extent of any prejudice to be sustained by the respondent in the context of his argument. However, for the reason already given, we do not see how the making of the order could prejudice the respondent in the sense that it would impact upon the extent of a common law claim, if such claim exists.

35. We turn to the argument that the respondent has a supposed lien over the applicants’ equipment. We agree with the applicants that if the respondent has some common law right of lien over property on his land, there is no reason to think that express statutory code rights in the form of an agreement or order do not cut through any such right. The question is whether loss of any right of lien can be said to prejudice the applicant. Fundamentally, if the respondent has a right of lien over the applicants’ property, that at its highest is a right of security for due satisfaction of his claim. Any such claim is illiquid and would require to be constituted in a court or tribunal of competent jurisdiction. Whether or not the applicant can constitute that claim is not dependent upon the existence of the lien. The question is whether the security is of any real value. There is no suggestion that the applicants, as an approved code operator, would be unable to meet a claim for damages should the claim succeed. So we do not see how the loss of “security” in the form of retention of the applicants’ property can properly be described as prejudice to the respondent in the sense that his claim is rendered unsecured, and therefore less valuable, by the making of the order.

36. It may be the case that the respondent will lose the bargaining chip of a nuisance factor in being able to prevent the applicants from connecting their equipment with potential customers. However it is clear that the Code has been designed to prevent an operators’ need for an electronic communications network featuring in negotiations as to the level of consideration: cf para. 24(3)(a). Equally a landowner’s recoverable loss can only be what he has actually lost. The fact that Parliament has inserted a “no scheme” assumption strongly suggests that, even if there were any ambiguity in the Code, we should not have regard to such a nuisance factor as being a legitimate right requiring protection under para. 21.

37. Moreover, in the light of the authorities cited to us, there is no case establishing that the present situation falls into any of the recognised categories of general or special lien. The respondent refers to a text, namely Steven, Pledge and Lien which argues a case for extending a special lien to exist in the context of delict. Statutory examples are given in the form of the Winter Herding Act 1686 and the Harbours, Docks and Piers Clauses Act 1847. At para. 11-33 the author gives the example that the owner of a garden arguably has a lien until reimbursed for damage caused by a car crashing through the fence and landing there. Under reference to Moore’s Carving Machine Co Ltd v Austin (1890) 33 SLR 613 it is said that the courts are willing for a lien to be exercised in order to secure a claim for damages for breach of contract. Thus, the author argues, there cannot be a problem in allowing a similar exercise in respect of damages due for liability in delict.

38. In this context the applicants drew our attention to the later opinion of Lord Malcolm in Ayr and General Finance Ltd v RYD Marine Ltd. In that case the defenders argued for a special lien that could cover a claim for damages for breach of warranty of title in a purported sale. Certain English authority was referred to, to the effect that there had never been a possessory lien at common law for damages for breach of contract. The question was whether the common law of Scotland allowed a different approach. Reference was made to Moore’s Carving Machine Co at para. [9] where in a case of a contract “of an exceptional nature” a retention was upheld for damages for breach of contract. The authors of Gloag & Irvine, Rights in Security (p353) were cited:

“This judgment, although it would seem to be new law, is in accordance with the well established rule that a party is entitled to withhold payment of a debt due by him under a contract, in security of a claim of damages for breach of that contract.”

The Lord Ordinary commented that the decision was not authority for the defender’s proposition, namely that there was a right of special lien to cover a claim for damages for breach of warranty. At para. [7] the Lord Ordinary also explained:-

“The lien is a means of enforcing performance of the contract. However that is a different thing from security for a damages claim for breach of contract, especially when the breach consists of delivering property belonging to another.”

39. We take from Ayr and General Finance Ltd v RYD Marine Ltd that in its current stage of development Scots law would require good reasons before extending a right of retention beyond the circumstances in Moore’s Carving Machine Co. If the court was not prepared to extend a lien to support a claim for damages for breach of warranty, a fortiori it would seem unlikely to be persuaded to do so for a claim for delict since, like here, there is no underlying contract between the parties. Accordingly had it been necessary for our decision we would have thought that the applicants have a good arguable case that a lien does not exist at common law in present circumstances.

40. It follows that in terms of the first part of the test in para. 21(2) we are not satisfied, in the event of an order for interim code rights being granted, the respondent will sustain the type of prejudice he has argued for. In principle any losses arising from the interim order are capable of being adequately financially compensated. Turning to the second part of the test under para. 21(3) and (4), on the basis of Mr Sherra’s affidavit we are satisfied that there is likely to be significant public benefit resulting from the making of the order outweighing any prejudice to the respondent. We accept that the applicants have made a good arguable case on these matters. We are therefore satisfied as to the test in para. 26(3) for making an order.

Decision

41. We shall therefore grant an order imposing interim code rights. Our clerk will liaise with parties as to the terms of the order.

Expenses

42. The applicants moved for expenses on the basis that they have been successful. The respondent opposes expenses on the basis that he has had to endure frustrating delays in attempting meaningful correspondence with the applicants since 2017, who accept they should not have installed the cabinet on his land without agreement.

43. In dealing with expenses para. 96(2) requires us to have regard to the extent to which any party is successful in the proceedings. Accordingly we have regard to the fact that the applicants have been wholly successful in their application, and the respondent has been wholly unsuccessful in his opposition. More generally expenses turn on which party can be seen to have been responsible for unnecessary expense of litigation. Questions of conduct can arise in this respect. But however frustrating it may have been dealing with the applicants in correspondence, and the so far inexplicable conduct on their part by installing the cabinet on the respondent’s land without permission, a decision on expenses would normally only take into account conduct in the process of litigation. This is distinguished from conduct forming part of the underlying dispute. Such matters sometimes overlap, but in our opinion, not here. It is clear that there was impasse at the point of the fourth notice and the application to the Tribunal. We can find nothing in the conduct of the application itself which should undermine the applicants’ case for expenses.

44. In these circumstances we find the respondent liable to the applicants for the expense of the application proceedings. We certify the proceedings as suitable for the employment of junior counsel. In the event of the level of expenses not being agreed the matter would require to be remitted to the Grampian, Highland and Islands Auditor based at Elgin Sheriff Court for taxation on the sheriff court scale.