Following the recent Court of Appeal decision in Redrow Homes Ltd, R (on the Application of) v Knowsley Metropolitan Borough Council  any prudent developer will be wary of committing himself to an open-ended obligation under a road adoption agreement, either in relation to the construction or the maintenance or the improvement of a highway.
Redrow Homes Ltd (“Redrow”) was granted outline planning permission for 525 dwellings on land at Huyton near Liverpool.
As usual Redrow were negotiating an agreement to be made between them and the local highway authority under section 38 of the Highways Act 1980 (“the 1980 Act”) whereby the estate roads, when constructed and satisfactorily maintained by Redrow for a period would become public highways maintainable by the Council at public expense.
The Council insisted that the agreement should make Redrow pay the Council £39,000 at the same time as the agreement was entered into. This would be a commuted sum representing the estimated cost of future maintenance by the Council of the street lights.
The Council said it could insist on this because section 38(6) of the 1980 Act contained the word “maintenance”.
The Court of Appeal agreed with the Council that section 38(6) is expressed in wide and unqualified terms and permits a highways dedication agreement to contain “such provisions as to … the bearing of the expenses of the construction, maintenance or improvement of any highway, road…….and other relevant matters as the authority making the agreement think fit”.
Nothing in the language of the subsection imposed a cut off as to what could be exacted from a developer for the periods before and after the road or way became a highway maintainable at the public expense.
Nor did the existence of such arrangements prevent the highway being “highway maintainable at the public expense” within the meaning of the legislation.
The highway was still maintainable at the public expense because the Council would from adoption have become liable to the public for its maintenance. (So long as the Council complied with any applicable procurement rules), what private arrangements it chose to discharge that public liability were up to it.
It was perfectly open for the Council, as here, to make an arrangement with a private company to fund the discharge of those liabilities.
This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.