Rainbow

Rainbow

Monday, July 27, 2015

Rogers Communications loses cell tower lease over move to sub-lease space to a third party

A Nova Scotia forestry company leased land to Rogers Communications for a cell tower.  The original 1988 lease was renewed several times and provided that renewals would be "upon the same terms and conditions" as the original lease.  In 2012, Rogers asked for the lessor's consent to a "co-location" agreement where Rogers would sub-lease space on the tower to a third party.

Although no agreement was reached and no consent was given, Rogers went ahead with the co-location arrangement.  The lessor sought a declaration from the Court that the lease was terminated as a result of Rogers' failure to obtain consent.  The lessor also sought damages.

In court, there was a dispute between the parties over whether the lease had been renewed in 2012 for a further five-year term.  Rogers argued that it had given notice as required by the lease to renew under the same terms and conditions and, therefore, it was entitled to the renewal of the lease (which would be more or less automatic as long as Rogers exercised its option to renew).  The lessor, on the other hand, contended that Rogers' proposed renewal amounted to a counter-offer (which it rejected).  The proposed renewal lease included the co-location arrangement and additional rent as compensation for the addition of a sub-tenant to the tower.  Rogers took the position that it was its right to include the additional provisions in the renewal.

The Court determined that the lease had not been renewed and ordered Rogers to vacate the lands within 8 months of an order to be issued setting out the terms of the decision.  Also, the lessor was awarded any rent not paid during the period after the lease had terminated.

The Court then proceeded to consider the lessor's request for damages for breach of contract, breach of duty of good faith and trespass.  The Court ruled that Rogers did not have the right under the lease contract to allow a third party to sub-let or co-locate - the lease provided rights to Rogers to erect, maintain and operate its tower, but it did not allow it to host a third party's services.  Also, the Court noted that Rogers had sought consent from the lessor to allow the co-location.  The lessor was awarded the sum of $3,000 in rent for each year in which the third party co-located on the tower.

Read the decision at: Atlantic Star Forestry Ltd. v. Rogers Communications Inc.