England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION

		TCC Court 7 133-137 Fetter Lane London EC4A 1HD
		8th August 2011

1. MR JUSTICE AKENHEAD: It is now 7.45 pm in this hearing for an application for an interim injunction, brought, albeit on a without notice basis, with notice being in fact given to the Defendant. It has had to be squeezed in between and after other court business today. It was originally listed for an hour and a half; with my ruling it will have taken more than six hours. The reason that it has to be dealt with today is because the Claimants fear that if the matter is not addressed before first thing tomorrow morning, there is a risk that Ofcom will approve a transfer of the licence to, it is said, potentially at least, the irretrievable and unquantifiable detriment of the claimants.
2. I have to say, at the start of this ruling, the imposition which has been placed on the Court is broadly unacceptable. Mr Justice Ramsey has been dealing with this matter on and off for the last three months and although I attach no blame to any individual at all here, it is unfortunate that this matter comes on at what is, I hope not going to be the eleventh hour tonight, in circumstances where very limited bundling was provided to the court last Friday. At that stage it lacked witness statements, skeleton arguments and the like. Skeleton arguments found their way on to my desk by about 8.30 this morning, Monday morning. I had other business for most of the rest of the morning and between 2.30pm and 4.30pm this afternoon, I had to come into court having read really very little and -- none of the witness statements and only limited parts of the extensive skeleton arguments -- and I am afraid that is no real way of asking the court to do business, particularly on a complicated matter. It is different if it is an injunction to stop someone trespassing on land but where the case is as complex as this, it is not acceptable to leave the court in the position of having to make important legal decisions which will substantially affect the commercial positions of the parties in this way. As I say, I attach no blame to any individual and we are where we are.
3. Mr Blunt, perfectly properly, opened this for about two and three quarter hours and that was on what was originally allocated as an hour and a half appointment. I do not think, I hasten to say, that he wasted any time, and similarly Mr Charlton in replying has not wasted time. It is just something that has necessarily taken the best part of six hours to present and argue.
4. I am not going to repeat or even summarise the judgments which Mr Justice Ramsey has already given; they set out the background to the claim and to today's application for an injunction and the relationship between the parties, and indeed Mr Justice Ramsey, having heard further argument in the latter part of July, is working on his third judgment in respect of those matters; one part of this exercise at least includes whether any injunctions should be granted and, if so, in what terms, arising out of such breaches as he has found in those first two judgments. He is due to return to hand that judgment down on 30 August; no doubt the parties will get it a day or two before, maybe even more, I don't know.
5. I remind myself of the law in practice, but I do not set it out in detail, in relation to the granting of interim injunctions. There must first be a serious issue to be tried; secondly, damages must be an inadequate remedy; and, thirdly, the balance of convenience must favour the granting of the injunction. That is broadly what was decided in the American Cyanamid case.
6. So I must first address whether there is, on the basis of the information that I have been able to distil, a serious issue to be tried. The first argument relates to whether or not there is likely to be a breach of Clause 9.3 of one of the key arguments (the 'MSSA') between the parties, OPCS and originally the BBC but now one or other of the Claimants. What has happened is that OPCS – I will call them Orange -- the second defendant, holds various licences. Everything Everywhere, EE, the First Defendant formerly known as T-Mobile, is in effect, through a Jersey company, now the holding company of Orange. That may be indirectly but it is effectively the owner of Orange.
7. EE has its own licence, as I understand it, and on 26 July 2011, the day that Mr Justice Ramsey handed down his second judgment, Orange applied to Ofcom for consent to the outright transfer and trade of its 2G and 3G licences to EE under paragraph 4.2(a) and 7 of the Wireless Telegraphy (and Mobile Spectrum Trading) Regulations 2001.
8. There had, previous to that application, been a purported attempt by Ofcom before there were any regulations in place, to grant such a licence to EE, but it seems to be reasonably clear that Ofcom could not actually do that unless and until there were regulations in place that made provision for that to happen. Those Regulations were made on 16 June 2011 and came into force on 4 July 2011.
9. It appears that it was not directly an issue dealt with by Mr Justice Ramsey as to whether Orange would be entitled to make such an application as they did on 26 July 2011, although he did deal with the issue as to whether Ofcom was entitled to have issued the license which it had purportedly done earlier in the year before there were any enabling regulations. However, it is clear from correspondence which the Court has been shown that certainly the possibility or even probability Orange would make the application which it has now made to Ofcom was very much on the cards, particularly if it lost on the issue about the viability of the license already given by Ofcom. It was absolutely clear that if the Claimants succeeded on their case, that the licence which Ofcom had purported to grant to effect the transfer of Orange's licence was in fact void, it must have been obvious to the Claimants that they faced a very real risk and a probability that Orange and EE would make such an application; and it is also clear that in the early part of July, the Claimants kept in touch with Ofcom, with that possibility or indeed probability in mind.
10. Obviously, there was a risk that the Claimants would not succeed on the point about the earlier licence, but I am certainly satisfied that the evidence reveals the Claimants were aware of the probability that there would be such an application. What is apparent is that when that application was made on 26 July, notified to the Claimants on 27 July, given the amount and amounts in issue or potentially in issue and the perceived risks to the Claimants involved in the making of such an application, I am absolutely satisfied that the Claimants could and should have been able to make a much more prompt application to this court than they have done so. Frankly the lateness of the application, again I hasten to say I am not criticising anyone personally, has made the administration of justice in this case extremely difficult to effect in a way in which the court can be wholly confident about. It can not be right for a party to expect a court to grant it an urgent injunction because a case is so complex and because the Court has so little time to take the large amount of material on board that the easy option for the Court is to grant a holding injunction.
11. With that, I turn to consider the extent to which there is, on the information, which I have been able to distil, a sufficiently serious issue to be tried, first of all in respect of Clause 9.3 of the agreement dated 26 January 1995, originally between the BBC and Orange, but now by, I assume, some form of effective novation between the Claimants, or one of them, and Orange. It was agreed that the shared use of what was then the BBC stations would be provided by the BBC and taken by the client in accordance with and subject to particulars and provisions set out in the site sharing agreement, general conditions or such amended conditions as may from time to time be substituted and the station schedules. I do not think I have had to look at the station schedules.
12. It is not appropriate to do a detailed analysis of what this contract really means on this sort of application but the key provision is Clause 9, 9.3 and it says this:

a. "The Client (Orange) will, at its own expense, retain throughout the Term the Client License ... added to the Agreement in accordance with the provisions of General Condition 16.7."

13. Clause 14, which deals broadly with assignment and sub-letting or sub-licensing, makes it clear that the agreement is "personal to the Client". As to whether there is much in that point about it being "personal to the client", I am not by any means convinced that it is, put in the context of an assignment or sub-contracting clause and it may well have no ambit wider than that covered in Clause 14.
14. Going back to Clause 9.3, that has to be looked at in the context that there seems to be no positive obligation on the Client, who is Orange, under this agreement, to use the facilities provided by the BBC or now one or other of the claimants. They of course still have to pay the fee or the rent for the use of the stations in question but there seems to be no positive obligation on them actually to use it. There are requirements, on the basis that they do use it, how they should do so and what they should be responsible for. But Mr Charlton makes the point that the term "Client License" is defined and it is defined in clause 1 as meaning:

a. "…any statutory licenses required by the Client including inter alia that required from the Radiocommunications Agency of the Department of Trade and Industry or its statutory equivalent or successor for the time being (now Ofcom) in force for the country in question in respect of each of the stations thereby permitting the Client to transmit telecommunication services via the Client's equipment in accordance with the terms of the agreement."

15. The clear tone at least, although I make no final finding, obviously, about that definition, is the context of what statutory licenses being "required" by the Client, Orange. Therefore, if one gets to a stage for Orange that no licence is statutorily required, it seems to me that there is a strong case for arguing that under Clause 9.3 Orange has no obligation to "retain" a licence which it is statutorily no longer required to hold.
16. Clause 9.3 can much more easily be read as requiring the Client to comply with the statute so far as the licence is concerned and, if no licence is statutorily required, it would seem odd at least that nonetheless the Client, that is Orange, is required to retain the licence. So I am not satisfied, on what I have heard today, that there is a serious issue about that.
17. The next issue relates to a breach of Clause 28. Now, at the moment, Mr Justice Ramsey, as I understand it, has decided this issue, in terms of what has happened in the past anyway, against the Claimants. The Claimants failed to secure permission to appeal from Mr Justice Ramsey, who did not think that there was a realistic prospect of success on that point. I see no reason to doubt the learned Judge's reasoning on this Clause 28 point. Unsurprisingly, and I do not say that in any way pejoratively given what is at stake, the Claimants sought permission to appeal from the single Lord Justice, and Lord Justice Richards certainly signed the permission to appeal form on 29 June 2011; in this context, he granted permission to appeal on this issue. In the "Reasons" box, he said this:

a. "Grounds 2 and 3 relate to clause 28.1 of the MSSA, the construction of which is raised by grounds for which permission has already been granted in both appeals. It is sensible for all the related issues of construction to be before the court on the hearing of the appeal."

18. I do not understand him to have formed the view that there was any realistic prospect of success, but it obviously made sense for the related issue, which it is now being said is a serious issue, to be considered by the full Court; all he is saying is that, as I read it, as a matter of appeal management, it is sensible for all the related issues of construction to be before the Court on the hearing of the appeal. That, no doubt, is true.
19. I have to say that I am not satisfied that there is a serious issue, or serious issues to be tried. I hasten to say it was at least properly arguable and that this is not a hopeless application.
20. If I had thought there were serious issues to be tried, I would then have come on to consider the question of whether damages were an adequate remedy.
21. Now, it is said by the claimants and supported by witness statements, that there is a potentially very substantial loss which it would be difficult to quantify vis-a-vis the landlords; these are the people/organisations who own the sites on which the apparatus is maintained. I have to say that there is remarkably little cogent evidence that there is likely to be any serious problem here at all.
22. First of all, the Claimants have been able to put a quantification on previous breaches which related to the roaming or joint use of the sites in the past by two or more organisations, and have been able to quantify it at a rate of I think £4,000 per site, at least on average, applied to many thousands of sites and to produce a quantifiable figure. There is no reason to think that a similar exercise could not be done here.
23. It is suggested that if the Claimants permit EE and Orange to use their sites in breach of the terms of the agreements with the landlords, that will put the Claimants in breach. That would obviously be an unsatisfactory state of affairs, but it seems to me that, apart from the exceptional case, and the evidence suggests that there will be a few such exceptional cases, that where an individual landlord, who may have decided that he, she or they do not really want Everything Everywhere or Orange on their site at all, may have some objection which cannot be compensated for in damages, it would seem that the vast majority of potential landlords would be more than happy to receive, if this is justified, a financial compensation. If Ofcom grants the licence to EE, which has been applied for, if that puts Arqiva in breach of their arrangements with the landlords, such breach is more than compensatable in damages, quantifiable on the basis of what is the enhanced value in what might be described as rental terms for something different, if that is what happens, happening on the site than hitherto.
24. Mr Phillips, who is the head of estates and property at Arqiva, has put in two witness statements for the purpose of this application, one dated 5 August and one dated yesterday; but it is the earlier witness statement which gives some evidence about the potential risk which it is said that Arqiva faces. I am not going to go to both examples but I will go to the example of a lease dated 12 May between Lord Cavendish of Furness and Crown Castle UK, in which Clause 3.5 provides that:

a. "Arqiva shall, not without the landlord's prior consent, such consent not to be unreasonably withheld or delayed, assign, other than by way of security or charge, under-let or part with possession of the premises or any part thereof provided that the tenant shall be entitled without consent to assign or share the premises with another group company."

25. Now, I cannot see that what is going to happen would involve Arqiva assigning, underletting or parting with possession as such or at all.
26. Clause 3.6 of the same lease provides:

a. "Notwithstanding the provisions of Clause 3.5, the tenant shall be permitted after the date of this agreement and without the further consent of the landlord.

b. "3.6.1, to share the use of the premises and the rights with permitted licensees who shall have no landlord and tenant rights subject to the payment of Supplemental Rent, provided always the tenant must notify the landlord in writing of the fact of any site sharing and sufficient evidence to validate the 30 per cent figure referred to in clause 1.12."

27. Now, so far as that is concerned, that points, if it is applicable at all, to a Supplementary Rent being capable of resolution in which case damages are an adequate remedy if Clause 3.6.1 is engaged at all. I am not saying whether it is or it is not but it certainly would seem to suggest that there is a quantifiable additional rent available.
28. So I do not see that it has been established that damages will not be an adequate remedy and indeed the examples given, the two examples given of leases with landlords, in my view, do not seem to demonstrate readily, or at all indeed, that there would be any breach. It may be that there would be and I am not making any final decision about that at all. It may be that there are other provisions in other leases which will put Arqiva in breach if one of the people they are in contract with, such as Orange or EE breaches their contracts with the Claimants may well give rise to a risk of damages, but that seems to me to be eminently quantifiable. I am afraid I therefore would have held that damages would be an adequate remedy.
29. If it had been necessary to look at the balance of convenience, I would have been in a quandary. In one sense, the only injunction that the Claimants are now seeking is an injunction to order Orange, maybe also EE, to write to Ofcom to delay or to postpone the granting of any licence. I suppose if Ofcom was going to reject it, they could go ahead and do that. The problem in terms of time has arisen because it is said, and I do not think it is challenged, that the earliest Ofcom could produce its decision on this is tomorrow morning or tomorrow at some stage. There has been no indication or hint, as I understand it, from Ofcom that the decision is that imminent but certainly the parties are proceeding on the basis that there is a real risk that that is the case.
30. Given what Ofcom has done in the past, namely in granting a licence in circumstances where this court, through Mr Justice Ramsey, has held that it was not entitled to do. So, it may be, I know not, that Ofcom may feel given its public status, but if they do, may feel predisposed to allow this application and there is therefore a risk that it might well be tomorrow. So all that the Claimants are asking for, and this goes to the balance of convenience rather than anything else, is a postponement or at least a request to Ofcom that it postpones its decision, at least for the moment until the end of August when Mr Justice Ramsey is due to return to hand his judgment down on related matters but albeit not on this matter.
31. All that really Mr Charlton has been able to say in response to that is that that this may induce some reputational damage on the part of EE and possibly Orange, but it is really EE more than anything else because Orange does not really actively trade much anymore. It has no employees, I am told.
32. I am not very impressed with the reputational damage argument.
33. The greater problem arises because I think that there is very little chance that Mr Justice Ramsey will be able to deal with this matter if I was to grant an injunction. He is certainly away until the Monday, if not arriving back on the Tuesday itself, 30 August. The chance to take all this on board along with other business that he has to do and I am told, and I do not think it is challenged, that Mr Justice Ramsey will have his plate full on Arqiva business, dealing with other matters, on the 30th in any event.
34. So the overwhelming probability therefore is that Mr Justice Ramsey would then be asked to extend any injunction for at least another four or five weeks and so the matter would go on and there would then be a real risk that a final trial, and final judgment on this may take a substantial period of time.
35. Mr Blunt has made the point that Mr Justice Ramsey is, however, amongst other things, also considering balance of convenience and damages being an adequate remedy in the context of the other breaches that he has found and making decisions about what relief will be granted. Of course, this is in the context of a case which is going to the Court of Appeal and almost everything any judge decides in the case, will be sought to be taken to the Court of Appeal by whichever party loses on whichever point. I am not saying that every point is being sought to be taken to the Court of Appeal but at least those points the parties think are arguable.
36. So the appeal hearing which was due to be heard last week has now been postponed I think until some date in October and I would doubt that there would be an extempore judgment in the Court of Appeal, given the complexities. So it may well be many months before the matters in issue on appeal are finally resolved.
37. I would have had to say that the balance of convenience was almost evenly balanced, probably evenly balanced and on that basis I would not have been satisfied that the balance of convenience favoured granting an injunction.
38. There are two things, however, I wish to add. I do think, although this is entirely a matter for it, but given that it is a public body and doubtless aware of the various applications to the court, albeit not this particular court, that can be made, it will want to be extremely careful in everything which it does with regard to Orange's application; it may feel that it wants to avoid any inference that it is predisposed to granting the application in the light of what it did before, but this is really entirely a matter for them, but I would hope that Ofcom may feel voluntarily that it is in its own interests and in the interests of the telecommunication industry at large to at least themselves defer this issue or the possible issue of this licence until at least Mr Justice Ramsey has handed down his judgment at the end of August.
39. That is entirely a matter for Ofcom and I am not in any way directing that. I will certainly direct that a copy of the judgment that I have handed down goes to Ofcom, I hope in a corrected form, first thing tomorrow morning, given that this is being transcribed.
40. The second thing I would say is this: that in dismissing the application, I am only doing so on the basis of the really rather limited opportunity that I have had to look at the papers and I, of course, have no idea what Mr Justice Ramsey is going to decide. It may be for all I know Mr Justice Ramsey himself has not finally decided what he is going to decide because he is working on the judgment, but I specifically would give the Claimants the permission to re-apply if, in the light of the more detailed knowledge that Mr Justice Ramsey has, particularly so far as damages being an adequate remedy and the balance of convenience is concerned, at least an opportunity to reapply.
41. I am not saying that my decision on whether there is a serious issue on the points which I have raised in this judgment is re-arguable because I do not think it is, with respect, but if the matter can be put in a different way and via a different route, I will leave that to the Claimants to decide whether that is possible. But certainly so far as the balance of convenience and the damages being an adequate remedy, I am not in a position to second-guess what Mr Justice Ramsey would decide.
42. So that is broadly where we are. So the application will be dismissed.