Transco Plc v Leicestershire County Council

Regulation 5(6) of the Street Works (Charges for Unreasonably Prolonged Occupation of the Highway) (England) Regulations 2001 is confined to remedial works because it operates for the purposes of regulation 5(3). Its deeming effect is rebuttable. Notices provide the basis for a prima facie calculation, but the highway authority or undertaker may prove the actual dates of commencement or completion. Charges must reflect reality rather than an irrebuttable fiction. The criminal sanction for late notices is not supplemented by disproportionate charging consequences. Time spent carrying out remedial works must be included in the duration of the original street works.

Leicestershire County Council claimed £111,500 from Transco plc in charges relating to six sets of under-street gas-pipe works. Transco had given commencement notices but, in five cases, had not given works clear or works closed notices. The Council treated later registration notices as completion notices and charged on the basis that the works continued until those notices were given.

Gray J, in the Queen’s Bench Division, decided both preliminary construction issues in favour of the Council in a judgment dated 7 April 2003: [2003] EWHC 709 (QB). The appeal concerned whether regulation 5(6) applied to non-remedial works and whether its deeming effect was conclusive or rebuttable.

1. Disposition. The appeal was allowed and Gray J’s findings on both preliminary issues were reversed. Lord Justice Kennedy and Lord Justice Jacob formed the majority on the first issue. All three judges agreed that the presumption under regulation 5(6) was rebuttable.
2. Scope of regulation 5(6). The majority held that regulation 5(6) is confined to remedial works. Its express reference to the purposes of regulation 5(3) makes it unacceptable to extend the provision to street works generally. Regulation 5(3) ensures that an undertaker cannot obtain extra time by carrying out the original works inadequately: the period during which required remedial works are performed is included in the duration of the works. The Code’s treatment of remedial works as wholly new works, and the related practice, were therefore wrong in law.
3. Lord Phillips MR dissented on the first issue. He considered that the statutory context, particularly section 74(5C) of the New Roads and Street Works Act 1991, supported a sensible construction applying the deeming provision to all works.
4. Rebuttability. The deeming effect is not conclusive. The notice scheme is based substantially on trust and requires charges to reflect actual dates where a notice was given early or late. Section 74(7B) of the 1991 Act and regulation 9 already provide a criminal sanction for failure to give required notices. Construing regulation 5(6) as an additional, irrebuttable and potentially disproportionate financial sanction would produce unacceptable and sometimes absurd results. Regulation 5(8), which permits charges to be reduced or waived, did not cure that difficulty.
5. Under the majority’s construction, non-remedial completion notices have no express deeming effect under regulation 5(6), but they will ordinarily be treated as determining completion unless evidence rebuts that inference.

• Court of Appeal (Civil Division): Appeal allowed. The findings on both preliminary issues were reversed.
• Queen’s Bench Division: Gray J decided the two preliminary issues in favour of Leicestershire County Council in the judgment dated 7 April 2003, [2003] EWHC 709 (QB).