R (Redrow Homes Ltd) v Knowsley Metropolitan Borough Council [2014] EWCA Civ 1433

Redrow confirms that a section 38 agreement can require a developer to contribute towards the future maintenance of an adopted road. A highway becoming maintainable at the public expense does not prevent the agreement from providing for those costs.

The Court of Appeal dismissed the developer’s appeal on 31 October 2014. For anyone negotiating the adoption of estate roads, the practical point is clear: we need to understand the maintenance obligations and price them into the agreement before signing.

Neutral citation

[2014] EWCA Civ 1433

Court

Court of Appeal (Civil Division)

Judgment date

31st October 2014

Judge

Lord Dyson MR, Lady Justice Gloster and Lady Justice King

Case number

C1/2014/0024

Why was Redrow challenging the maintenance payment?

Redrow had outline planning permission for 525 homes at Huyton, near Liverpool. The first phase included estate roads which were intended to become public highways maintainable at the public expense through an agreement with Knowsley Metropolitan Borough Council under section 38 of the Highways Act 1980.

The council required a commuted sum of £39,000 towards the future maintenance of street lighting. This would be payable when the section 38 agreement was made. Redrow argued that the legislation did not permit an agreement to require payment for maintenance after adoption.

The dispute therefore concerned the council’s statutory power to include that kind of payment. The court was not deciding a general tariff for street lighting or assessing what every development should pay. The facts and the issue are set out at paragraphs 1 to 4 of the judgment.

The court read section 38(6) broadly

Section 38(6) of the Highways Act 1980 allows an agreement to contain provisions about the expenses of construction, maintenance or improvement, together with other relevant matters which the highway authority thinks fit.

The Court of Appeal held that this language contains no restriction confining maintenance contributions to the period before adoption. At paragraph 14, the Master of the Rolls said: It could hardly be wider in its scope.

That wording supported an agreement requiring a commuted sum for future maintenance, even where the road would become maintainable at the public expense. Redrow’s proposed limitation could not be read into the statutory language.

This is why the judgment matters to a section 38 negotiation. The argument that adoption alone removes the legal power to agree future maintenance contributions has already been rejected by the Court of Appeal.

The highway authority remains responsible for maintenance

At paragraphs 15 and 16, the court explained the significance of a highway being maintainable at the public expense. The expression concerns the highway authority’s public law responsibility to maintain the highway. It does not require every pound spent on maintenance to come from the authority’s own funds.

An agreement may provide for another party to meet maintenance expenses or undertake maintenance work. The authority’s responsibility nevertheless remains. If that party fails to carry out the agreed work, the authority cannot treat the contract as removing its statutory duty.

For developers and purchasers, that distinction helps explain how an adopted road can sit alongside an agreed financial contribution. We need to read the actual agreement to establish who pays, when payment is due and which liabilities continue after adoption.

What remains open for negotiation?

The judgment establishes the breadth of the statutory power. It does not approve every amount a highway authority might request or establish that all possible maintenance obligations are commercially acceptable.

The court recognised that a developer could be cautious about taking on an open-ended liability. At paragraph 23, it treated that concern as a matter for the developer’s commercial judgement when negotiating an agreement.

Our practical reading is that the agreement should make the proposed liability understandable. The items covered, calculation period, payment triggers, indexation and any continuing obligations all deserve attention. Those are matters to review with the highways engineer and the solicitor dealing with the adoption agreement.

The case therefore supports asking for the basis of a commuted sum and negotiating its terms. It does not support dismissing the request simply because the council will maintain the road after adoption.

Is section 37 an alternative?

The court also considered the separate procedure in section 37 of the Highways Act 1980. Its reasoning at paragraphs 22 to 24 recognised that a developer is not compelled to enter a section 38 agreement.

Section 37 has its own notice, certification and other statutory requirements. Its availability and practical consequences need to be assessed against the particular road and development. Redrow should not be read as promising that a developer can avoid an unwanted agreement by securing immediate adoption through section 37.

The current text of sections 37 and 38 was checked for this page. The material wording of section 38(6) remains the basis for the judgment’s relevance to maintenance contributions.

Using Redrow on a development project

Start with our section 38 agreement guide for the wider adoption process. Then check the proposed agreement against the actual roads, infrastructure and maintenance arrangements for the scheme.

Redrow provides a useful answer to the legal power question. The financial exposure still depends on the terms being negotiated. Resolving those terms early helps avoid an unexpected cost appearing when the developer is trying to complete the highway adoption.

Read the original Redrow judgment

The complete 10-page Court of Appeal judgment is held locally in the Planning Geek case law library. Gold Members can open the protected PDF below. It includes all 29 numbered paragraphs and the court’s conclusion dismissing the appeal.

Page created: 6th November 2026