O'Connor & Anor v Wiltshire County Council

For a claim under Part I of the Land Compensation Act 1973, a highway is maintainable at the public expense at the relevant date if it falls within section 36(2)(a) of the Highways Act 1980. The inquiry asks whether the highway was constructed by a highway authority and whether it was constructed on behalf of a non-highway authority. Construction through an agent remains construction by the highway authority. Payment of part of the cost by a developer or another authority does not, by itself, mean that the highway was constructed on that person’s behalf. Section 278 is a funding mechanism; the construction power derives from section 24(2). Where the highway was maintainable when first opened to traffic, section 19(3) does not bar compensation.

The claimants owned a dwelling affected by noise from the Calne Northern Distributor Road. They claimed compensation under Part I of the Land Compensation Act 1973. The Lands Tribunal decided that the road was not maintainable at the public expense when opened, that section 19(3) barred the claims, and that the alternative Convention arguments failed. It also rejected the claimants’ case that the road had been constructed by the County Council under section 36(2)(a) of the Highways Act 1980. The appeal concerned whether the acceleration agreement made the County Council the constructor of the road and whether the road was constructed on behalf of a non-highway authority.

Appeal allowed. Lord Justice Chadwick gave the leading judgment, with Lord Justice Scott Baker and Lord Justice Thomas agreeing.

1. The relevant statutory question was whether the road fell within section 36(2)(a) of the Highways Act 1980. That required two distinct inquiries: whether it was constructed by the County Council and, if so, whether it was constructed on behalf of a person who was not a highway authority.
2. The acceleration agreement stated that the Consortium would construct the road as agent for the County Council, although it would enter the construction contract as principal. The contractual relationship between the Council and the Consortium governed. The agreement was not a sham or mere labelling device. The road was therefore constructed by the County Council through the Consortium’s agency.
3. The expression on behalf of in sections 36(2)(a) and 38(3)(b) did not mean simply for whose benefit the highway was constructed. Section 278 did not independently confer power to construct a highway. Section 24(2) supplied that power, while section 278(1)(a) enabled the authority to agree that another party would fund all or part of the works. A payment or contribution under sections 274 or 278 did not necessarily make the highway one constructed on behalf of the payer.
4. Considering the agreements, landownership, funding arrangements and dedication obligations together, the road was not constructed on behalf of the Consortium, the District Council, or any combination of non-highway authorities excluding the County Council. It therefore fell within section 36(2)(a) and was maintainable at the public expense when first opened to public traffic. Section 19(3) of the Land Compensation Act 1973 did not bar the claims.
5. The Convention issue did not arise. Whether section 19(3) might be incompatible in a case where the highway was not maintainable when opened was left undecided; any observations would have been obiter. The conclusion on public maintainability did not prevent the County Council relying on the Consortium’s contractual maintenance obligation. If compensation could not be agreed, the reference was to be restored to the Lands Tribunal.

• Court of Appeal (Civil Division) — [2007] EWCA Civ 426: appeal allowed. The road was held to have been constructed by the County Council and to be maintainable at the public expense. The reference was to be restored to the Lands Tribunal if the amount of compensation was not agreed.
• Lands Tribunal — Order dated 29 March 2006 in reference LCA/73/2005: preliminary issue decided against the claimants and the claim dismissed.