Gwynedd Council v British Telecommunications Plc

Under the statutory cost-sharing scheme, “allowable costs” are not confined to the physical execution of works protecting utility apparatus. They include reasonable costs of the measures, subject to the exclusion for the initial set of plans and estimates. Where the staged procedure is followed, the C3 draft scheme and budget estimate are the initial set. A C4 detailed estimate is a further estimate and its reasonable cost is allowable. If C3 is omitted and the parties proceed directly to C4, the first C4 estimate is initial and non-chargeable, while later estimates required by the authority are chargeable. The Code of Practice assists construction, but the Act and Regulations prevail in the event of inconsistency.

British Telecommunications plc claimed £684.14 from Gwynedd Council for preparing a detailed estimate concerning measures to protect apparatus affected by major bridge works. The Manchester County Court, His Honour Judge Holman, gave judgment for BT and made a declaration that the authority had to meet its share of the undertaker’s reasonable costs of an Appendix C4 detailed estimate, subject to an agreed foreshortening of the procedure. Gwynedd appealed. The central issue was whether the first C4 estimate was an allowable cost under regulation 2(2)(a) of the Street Works (Sharing of Costs of Works) Regulations 1992, or part of the excluded initial plans and estimates.

Lord Justice Wall gave the leading judgment, with Lord Justices Jacob and Auld agreeing.

1. Disposition. The appeal was dismissed. The county court had reached the correct conclusion that BT’s detailed estimate was chargeable.
2. The combined scheme in sections 84 and 85 of the New Roads and Street Works Act 1991 distinguishes the measures required in relation to an undertaker’s apparatus from the execution of the highway authority’s works. In this context, “measures” means the works needed to protect the undertaker’s apparatus. “Allowable costs” under regulation 2(2) are not restricted to the physical execution of those works. Measures require planning, and reasonable planning costs fall within the concept of allowable costs unless excluded by regulation 2(2)(a).
3. Regulation 2(2)(a) excludes the cost of preparing the initial set of plans and estimates, but not further plans and estimates required by the authority. The Code of Practice identifies preliminary inquiries at C2, draft schemes and budget estimates at C3, and final detailed schemes and estimates at C4. Where all three stages are followed, the C3 document is the initial set. The C4 estimate is therefore a further estimate and its reasonable cost is an allowable cost.
4. Where the parties proceed directly to C4 because the earlier stages are omitted, the first C4 plans and estimate constitute the initial set and are not chargeable. Further plans or estimates required by the authority remain chargeable as allowable costs.
5. The Code of Practice is practical guidance rather than legislation. Its language may assist construction, but the Act and Regulations prevail if there is inconsistency. The use of “preliminary” in the Code does not alter the construction of “initial” in regulation 2(2)(a). The court also endorsed the need for close co-operation and co-ordination between highway authorities and undertakers, and criticised the Code’s failure to follow the statutory language clearly.

• Court of Appeal (Civil Division): On 16 July 2004, dismissed Gwynedd Council’s appeal. The decision is reported at [2004] EWCA Civ 942.
• Manchester County Court: On 12 December 2003, His Honour Judge Holman gave judgment for British Telecommunications plc and made a declaration concerning the authority’s liability for the reasonable costs of an Appendix C4 detailed estimate.