Highways – Adoption – Highways Act 1980 – Appellant having planning permission for residential development including construction of estate roads – Roads intended to be adopted as highways maintainable at public expense by agreement with respondent local highway authority under section 38 of 1980 Act – Respondents refusing to enter into such agreement unless appellant paying sum to cover estimated costs of future maintenance of street lighting – Whether section 38 agreement lawfully capable of requiring contribution to costs of maintenance after date of adoption – Appeal dismissed
The appellant had outline planning permission to carry out a development of 525 dwellings on land at Huyton, near Liverpool. The first phase of the development included the construction of estate roads. It was intended that the roads, once constructed, should be adopted by the respondent local highway authority as highways maintainable at public expense, pursuant to an agreement under section 38(3) of the Highways Act 1980. However, the respondents were unwilling to enter into such an agreement unless it contained a provision for the appellant to pay £39,000 as a commuted capital sum to cover the estimated future cost of maintaining the street lighting on the roads.
In judicial review proceedings against the respondent, the appellant contended that no provision for payment in respect of future maintenance could lawfully be included in a section 38 agreement. The respondents argued that the matter fell within section 38(6), permitting the inclusion of such provisions as the highway authority thought fit regarding “the bearing of the expenses of the construction, maintenance or improvement of any highway… to which the agreement relates”. The respondents contended that the word “maintenance” included the future maintenance of the road following its adoption.
The issue was determined in the respondents’ favour in the court below. The judge held that a section 38 agreement could contain provision for a party other than the highway authority to pay a sum referable to the expenses of highways maintenance after the date on which the highway became maintainable at public expense: see [2013] EWHC 3734 (Admin).
The appellant appealed. It submitted that a provision placing the expense of maintenance on a private person, rather than on the public through the highway authority, was a contradiction of the essence and purpose of a section 38 agreement.
Held: The appeal was dismissed.
Section 38(6) was expressed in wide and unqualified terms. There was nothing in its language that drew a distinction between what was permitted for the periods before and after the road became a highway maintainable at the public expense. It did not expressly state that such an agreement could apply only to the period before dedication as a highway maintainable at the public expense and, properly construed, it did not have that effect. As a matter of ordinary language, the phrase “maintainable at the public expense” connoted that the highway authority would be liable as a matter of public law to maintain the highway, but it did not indicate how the authority were required to discharge that liability. The authority could carry out the maintenance themselves or make an agreement for a developer to carry out the work. They could 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 was adopted, the highway authority remained liable and the highway continued to be maintainable at the public expense. The phrase “maintainable at the public expense” was not intended exclude the possibility of privately maintaining, or privately contributing to the cost of maintaining, a highway maintainable at the public expense. Private maintenance or the provision of expenses was not inconsistent with the concept of a highway being maintainable at the public expense: see sections 44 and 278.
Moreover, it was not disputed that, in relation to agreements made under section 38(1) with persons who were liable “under a special enactment or by reason of tenure, enclosure or prescription to maintain a highway”, a provision of sums referable to future maintenance could be agreed or could be the subject of an order of the magistrates’ court on an application under section 53. Although those provisions were rarely applied today, and there were differences between their subject matter and that of section 38(3), there was no reason why parliament would have intended to permit, and indeed require, a provision of sums referable to future maintenance in relation to agreements made under section 38(1) but not to do so for agreements under section 38(3).
Although a prudent developer would be wary of committing itself to an open-ended obligation, whether in relation to construction, maintenance or improvement of the highway, that was a matter for its commercial judgment and it could not be obliged to commit to an unreasonable bargain. A developer could not be compelled to enter into an agreement under section 38(3) and would be unlikely to do so unless it considered that course to be in its commercial interests. Section 38 agreements were advantageous to both developers and highway authorities and there was no reason to suppose that parties would not usually negotiate sensibly. If the highway authority were only prepared to offer a deal that was not commercially acceptable to the developer, then the developer could still seek to have the road adopted using the machinery laid down by section 37.
Michael Barnes QC (instructed by the legal department of Redrow Homes Ltd) appeared for the appellant; Paul Tucker QC and John Hunter (instructed by the legal department of Knowlsey Metropolitan Borough Council) appeared for the respondents.
Sally Dobson, barrister
Click here to read the transcript of R (Redrow Homes) v Knowsley MBC
