British Telecommunications plc v Gwynedd Council

Roadworks — Measures to protect undertaker’s apparatus — Council’s duty to pay share of cost of measures — Regulation 2(2) of Street Works (Sharing of Costs of Works) Regulations 1992 — Exclusion of costs incurred in preparing initial set of plans and estimates — Whether cost of preparing detailed estimate pursuant to code of practice to be excluded — Judge holding such costs recoverable — Appeal dismissed The appellant council undertook roadworks, in relation to which steps had to be taken to protect the respondent undertaker’s apparatus. Section 84(1) of the New Roads and Street Works Act 1991 and regulation 3 of the Street Works (Sharing of Costs of Works) Regulations 1992 meant that the council were required to pay 82% of the allowable costs incurred by the respondent in executing the necessary protective measures. Regulation 2(2) excluded from the “allowable costs” those costs incurred “in preparing the initial set of plans and estimates in relation to those measures”, but not those incurred in preparing “further plans and estimates”. The parties followed the procedure set out in a June 1992 code of practice. This provided for a number of stages, culminating, in appendix C4, in the provision by the undertaker of a detailed estimate of its costs. The code further provided that the allowable costs would not include the costs of that part of the work described in appendix C4, consisting of “preliminary planning and liaison”. Although the code permitted the parties to shorten the process by agreement, thereby omitting stages C2 and C3, the draft scheme and the budget estimate respectively, they did not do so. Eventually, the respondent submitted a detailed estimate, and billed the council for the preparation costs. The council denied their liability to pay, contending that the item was not part of the “allowable costs”. The respondent brought proceedings to recover that sum. Allowing the claim, the judge held that, except where the procedure had been shortened and the C2 and C3 stages omitted, an authority were required to meet their share of an undertaker’s reasonable costs of providing a detailed estimate under appendix C4. He held that although the C4 stage might not be the end of the process, it could not properly be characterised as “initial” for the purposes of the 1991 Act and the 1992 Regulations. The council appealed. Held: The appeal was dismissed. The trial judge had reached the correct conclusion. The allowable costs of measures that had to be taken in relation to the protection of apparatus were not confined to the costs of executing the physical work. Measures designed to protect the equipment of an undertaker had to be planned. On the facts of the case, where the parties had proceeded from the C2 stage through C3 and then to C4, the C4 plans and estimates prepared by the respondent were not the “initial set of plans and estimates”. The costs excluded were those at stages C2 and C3. The C4 plans and estimates were “further plans and estimates” and were therefore an allowable cost within regulation 2(2). The code of practice was not inconsistent with regulation 2(2): it envisaged a situation where the parties had proceeded directly to C4, without carrying out C2 and C3, with the consequence that the C4 work represented both the initial plans and estimates within regulation 2(2) and the “preliminary planning and liaison” within the meaning of the code. Stephen Sauvain QC and Ruth Stockley (instructed by the solicitor to Gwynedd Council) appeared for the appellants; Ian Mayes QC and Niran de Silva (instructed by the solicitor to British Telecommunications Group) appeared for the respondent. Sally Dobson, barrister