City of Westminster v Fountain & Colonnade Management Ltd

Under a highway agreement, an obligation to contribute a fair proportion of reasonable repair and maintenance costs is construed from the agreement’s language, purpose and practical context. Items forming part of the supporting structure may fall within the contribution clause, as may movement joints which in fact benefit the highway, even if they also serve adjoining buildings. Replacing failed components with the only appropriate modern equivalent, or providing proper support for them, remains repair rather than improvement where the work restores satisfactory function. A fair proportion may properly be assessed by the extent to which public and private use contributed to the need for the works. The assessment need not exclude costs arising from an inherent defect, premature failure, or components serving both the highway and buildings where the agreement covers the reasonable costs of repair and maintenance.

Fountain and Colonnade Management Ltd, successors in title to the developer, claimed a contribution from the Corporation under a Highways Act 1980 section 38 agreement. The claim concerned the replacement of movement joints in Bulleid Way and associated supporting plinths forming part of a structure beneath a public highway.

The Technology and Construction Court held that the agreement required the Corporation to contribute a fair proportion of the reasonable repair and maintenance costs and awarded £126,653.11 including interest. The Corporation appealed, challenging the construction of the contribution clause, the characterisation of the works as repairs rather than improvements, and the assessment of the fair proportion at 90%. The central issues were whether the structure and movement joints were covered, whether the remedial works were repairs, and how the contribution should be apportioned.

1. Appeal dismissed. The Corporation was liable under clause 9 of the section 38 agreement made pursuant to the Highways Act 1980 to pay a fair proportion of the reasonable costs incurred in repairing and maintaining the structure and service media enjoyed in connection with the highway.
2. The words “all such items” referred conjunctively to both the structure and service media passing through it. The earlier agreement under section 52 of the Town and Country Planning Act 1971 confirmed that construction, because its maintenance provisions used materially similar language and showed a clear allocation of responsibility.
3. The movement joints were enjoyed in connection with the highway. They formed part of the raft and highway surface and protected the highway, as well as the buildings, against movement. The engineering reasons for selecting the agreed four-joint design did not displace that conclusion.
4. The replacement of the failed Waboflex joints with Britflex joints was repair, not improvement. The new joints performed the same function and were the only appropriate solution when replacement became necessary. The reinforced-concrete replacement of the plinths was also part of the necessary practical package of repair, since proper support was required before the new joints could be installed.
5. The distinction between repair and improvement in landlord and tenant authorities was of limited assistance because the present liability arose under a highway agreement. Even applying that analogy, the outcome was repair. In particular, the reasoning in Ravenseft Properties Ltd v Dabstone (Holdings) [1980] 1 QB 12 supported treating remedial work as repair where the replacement method was the appropriate professional response to the defect, and Stent v Monmouth District Council [1987] 54 P&CR 193 supported the same conclusion where improved materials achieved the original function.
6. A “fair proportion” was properly assessed by comparing the contribution made by public use and use connected with access to the buildings to the need for the particular repairs. The evidence showed that heavy public traffic, especially buses and coaches, overwhelmingly caused the damage. The judge was entitled to award 90%. There was no basis for deductions for the inherent weakness in the plinths, wider commercial benefits, early failure of the original joints, or the two intermediate joints serving the building design.
7. The President dismissed the appeal. Lord Justice Keene and Lord Justice Wall agreed.

• Court of Appeal (Civil Division): Appeal from the judgment of His Honour Judge Richard Seymour QC dated 28 February 2005. The appeal was dismissed.
• Queen's Bench Division, Technology and Construction Court: Judgment for Fountain and Colonnade Management Ltd, with the Corporation held liable to contribute £126,653.11 including interest.