Fountain & Colonnade Management Ltd v Westminster City Council

Repairing agreement — Claim for contribution to cost of repairs — Whether judge correct in finding repairs to items enjoyed in connection with highway — Whether repairs or improvements — Fair proportion of cost — Appeal dismissed The respondent held a lease of two buildings that had been built, together with a highway, on a raft above the platform and tracks of Victoria railway station. The raft incorporated four movement joints that were intended to protect the highway and buildings from damage arising from the expansion and contraction caused by variations in temperature. The respondent’s predecessor in title had entered into an agreement with the appellant council under section 38 of the Highways Act 1980. By clause 9 of that agreement, it undertook to “maintain the Structure and all service media passing through the Structure”, while the appellants agreed “to pay a fair proportion of the reasonable cost of repairing and maintaining all such items enjoyed in connection with the Highway”. The “Structure” was defined as being “the structure below the [Highway]… including the movement joints”. A survey subsequently revealed that the movement joints were in a poor state and that they were likely to allow water to leak into the station below. The respondent replaced the joints with those of a different type and also renewed the concrete plinths, which were found to be damaged. It brought proceedings to recover a proportion of the cost of the works from the appellants pursuant to the section 38 agreement, arguing that the damage had been caused by public use of the highway. Denying liability, the appellants argued that: (i) the expression “all such items” in clause 9 did not include the structure itself; (ii) the joints were not items “enjoyed in connection with” the highway; and (iii) in any event, the works amounted to improvements and not repairs. The parties’ experts were agreed that replacement joints of the type used were an appropriate solution. The judge found for the respondent on all three points, holding that “all such items” did include the structure and service media, and that the appellants were obliged to pay a fair proportion of their upkeep subject only to their being enjoyed in connection with the highway, which was the case with the joints: see [2005] EWHC 260 (TCC); [2005] PLSCS 37. The appellants appealed. Held: The appeal was dismissed. The judge’s conclusions had been correct. He had correctly construed clause 9, and had been right to hold that there was no commercial justification for departing from its language. As to whether the joints were “enjoyed in connection with the Highway”, he had correctly identified the relevant question. They plainly were so enjoyed. Moreover, he had rightly identified the provision of satisfactory support for the new expansion joints as forming part of the package of repair agreed by the experts as being necessary, so that the works amounted to “repairs” and not improvements, notwithstanding that the new plinths were of a different and better type. The judge’s finding as to what constituted a “fair proportion” of the costs of the repairs could not be criticised. Thomas Graham (instructed by the legal department of Westminster City Council) appeared for the appellants; Dominique Rawley (instructed by Macfarlanes) appeared for the respondent. Sally Dobson, barrister