A developer has failed in a Court of Appeal tussle with a local authority over future maintenance cost of street lighting on access roads to a 500-plus home development in Huyton, Liverpool.
Redrow Homes had claimed that a ruling to the effect that a council could require it to pay £39,000 to cover the cost could expose developers to all aspects of future maintenance of roads that are intended to be maintained at public expense following dedication.
Though the Master of the Rolls said that the dispute relates only to street lighting and a relatively small sum, he added that the issue of statutory interpretation is of wide importance, and that it was perhaps surprising that there is no previous authority on it.
However, he upheld a High Court decision in favour of Knowsley Metropolitan Borough Council on the issue.
In February 2011, Redrow was granted outline planning permission to carry out a development of 525 dwellings on land at Huyton.
The first phase of the development includes estate roads constructed by Redrow, and the Master of the Rolls said that the normal course with such developments is that the roads when constructed become dedicated as public highways maintainable at the public expense, a result usually achieved by agreement between the developer and the local highway authority under section 38 of the Highways Act 1980.
He said: “In the present case, both Redrow and Knowsley metropolitan borough council as the highway authority wish in principle that this should occur. A part of the roads will be street lighting. The council says that it will not enter into an agreement under section 38 unless it contains 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.”
Redrow claimed that no such provision could lawfully be included in a section 38 agreement, but the council maintained that it could, by reason of the word “maintenance” in section 38(6), which it claimed refers to and includes future maintenance of the road following its adoption.
Dismissing Redrow’s case at the High Court, Deputy Judge Michael Fordham QC held that the council’s interpretation of section 38(6) was correct.
He granted a declaration that “on the correct interpretation of section 38(6) of the Highways Act 1980, a section 38 agreement, including when made under section 38(3), can in law contain provision for the party other than the highway authority to pay a sum (whether a commuted sum or otherwise) referable to the expenses of a highways maintenance after the date on which it becomes maintainable at public expense.”
Redrow claimed that, if the judge’s interpretation is correct, then section 38 agreements may lawfully contain a provision for a commuted sum to cover all aspects of future maintenance of the highway into the indefinite future, or a provision that the developer shall himself pay for (or even carry out) all aspects of future maintenance whenever they become necessary.
It argued that the purpose and essence of an agreement under section 38 is that a private road becomes both a highway open to the public and a highway maintainable at public expense by the highway authority, and that a provision in an agreement whereby the expense of maintenance falls on a private person is “a contradiction of that essence and purpose”.
However, the Master of the Rolls ruled that the judge had reached the correct conclusion.
He said: “The starting point is that section 38(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.”
He said that, 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.
He added: “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.”
“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.”
The Queen on the application of Redrow Homes Ltd v Knowsley Metropolitan Borough Council Court of Appeal (Master of the Rolls, Gloster and King LJJ) 31 October 2014
Michael Barnes QC (instructed by Legal Director, Redrow Homes Limited) for the Appellant
Paul Tucker QC and John Hunter (instructed by Legal Dept/Knowsley metropolitan borough council) for the Respondent
