November 4th, 2014

The normal course with highway developments is that estate roads when constructed become public highways maintainable at the public expense.  This result is usually achieved by the mechanism of an agreement made between the developer and the local highway authority under s38 Highways Act 1980.  Such an agreement has two aspects: first, the roads are dedicated and adopted as public highways; and, second, they become highways maintainable at the public expense.

In R (Redrow Homes Ltd) v Knowsley Metropolitan Borough Council [2014] EWCA Civ 1433 both Redrow and the Council as the highway authority wished in principle that this should occur.  A part of the roads will be street lighting. The Council said that it would not enter into an agreement under s38 unless it contained a provision that Redrow pays at the date of the agreement £39,000, which is a commuted sum representing the estimated capital sum to cover the cost of future maintenance of the street lights. The Council said that such a provision in a s38 agreement is lawful by reason of the word “maintenance” in s38(6) and that maintenance refers to and includes future maintenance of the road following its adoption. Redrow said that no such provision may lawfully be included in a s38 agreement.

The case related only to street lighting and a relatively small sum. However, the issue of statutory interpretation is of wide importance.

The Court of Appeal found in favour of the Council.  Lord Dyson MR, with whom Gloster and King LJJ agreed, said:-

“ … The starting point is that s38(6) is expressed in wide and unqualified terms. On its face, it permits an agreement between a developer and a highway authority containing “such provisions as to the dedication as a highway of any road or way…, the bearing of the expenses of the construction, maintenance or improvement of any highway, road…to which the agreement relates and other relevant matters as the authority making the agreement think fit”. It could hardly be wider in its scope. In particular, there is nothing in the language of the subsection which draws a distinction between what is permitted in respect of the period before and what is permitted in respect of the period after the road or way becomes a highway maintainable at the public expense….”

“19.       … First, as a matter of ordinary language the phrase “maintainable at the public expense” connotes that the highway authority will be liable as a matter of public law to maintain the highway. But it does not indicate how the authority is required to discharge that liability. The authority may carry out the maintenance itself or make an agreement for a developer to carry out the work. It may choose to pay for the maintenance of the highway out of public funds or obtain funds for doing so from the developer or a combination of the two. Whichever course is adopted, the highway authority remains liable and the highway continues to be maintainable at the public expense. Thus, for example, if a developer agrees to maintain a dedicated highway and defaults on his obligation, the highway authority remains liable. That is because the highway is maintainable at the public expense. …

20.        Secondly, quite apart from the natural meaning of s38(6), … it is clear from other provisions of the 1980 Act that Parliament did not intend by the use of the phrase “maintainable at the public expense” in the subsection to exclude the possibility of an act of privately maintaining or of privately contributing to the cost of maintaining a highway maintainable at the public expense. It can be seen from provisions such as ss 44 and 278 that an act of private maintenance or an act of the provision of expenses is not inconsistent with the concept of a highway being maintainable at the public expense.

21.        S44 provides that a person who is liable “under a special enactment or by reason of tenure, enclosure or prescription to maintain a highway” may enter into an agreement with the highway authority “for the maintenance by him of any highway maintainable at the public expense by the highway authority”. Such a person may also enter into a s38(1) agreement. Parliament clearly envisaged in such circumstances that the highway remains maintainable at the public expense notwithstanding continuing maintenance obligations on the part of the counterparty to the agreement. S278 provides that a highway authority may enter into an agreement with any person for the execution by the authority of any works which the authority is or may be authorised to execute on terms that that person pays for the whole or part of the cost of the works. S278(3) provides that the agreement may also “provide for the making to the highway authority of payments in respect of the maintenance of the works to which the agreement relates”. There can be no doubt that an agreement made pursuant to s278 can provide for a payment in respect of maintenance of a highway, including a highway maintainable at the public expense.

22.        Thirdly, … s38(1) when read together with s53 shows that Parliament cannot have intended to preclude the possibility of an agreement for maintenance by a developer after the dedication of a highway. …”

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