Decision details

CYC entered into a Section 38 agreement under the Highway Act 1980 with FoxOak Properties Limited and National Westminster Bank on the 15th September 2003, to adopt the road, FoxOak Park accessing a new business park off Common Road in Dunnington.
The road was constructed up to binder course only, with a section of footway missing and no street lighting.
It is reported that the developer ran out of funds at the time of the development to complete the highways works and the current owner inherited the business and liability created by the surety several years ago.
The current director of FoxOak Properties Ltd surfaced the carriageway (top 40mm of tarmac), installed the missing area of footway, unfortunately subsequently damaged by the development of an additional industrial unit on the adjacent land, and paid CYC to install the prescribed street lighting.
The development was not in proximity to a sewage outfall, as such the development’s foul waste was intended to be treated and sent to soakaways. The highway agreement stated that the highway gullies would drain to a highway drain, under Common Road, and into the ditch opposite the development.
A recent drainage CCTV survey found significant material breaches of what was included in the highway agreement compared with what was constructed. The key issues are:
1. The condition and construction of the assets were poor, open joints, cracking and fractures, particularly in the asset under Common Road.
2. No documentation could be located to permit discharge into the ditch, which is private land at the location.
3. No headwall was constructed in the ditch.
4. The highway drainage system extended beyond what was specified in the agreement; into the yard that serves Unit 6.
5. The survey shows that the waste treatment has an outfall which flows into the designated highway drain. A number of the properties have specific rights written into their deeds to permit this.

1. Adoption: Adoption of FoxOak Park would result in CYC taking on a significant liability with the drainage system and being responsible in perpetuity for the asset removing private as well as public water and possible treated foul waste.
2. Determination of the Section 38 Agreement by way of written notice under clause 15 of the agreement because of the material breaches of the developer’s contractual obligations, and application of clause 16, Power to execute works in default. i.e. use the bond, £43,730.00 to carry out the works.
3. Determination of the Section 38 Agreement by way of written notice under clause 15 because of the material breaches of the developer’s contractual obligations and not seek adoption: i.e. keep FoxOak Park privately maintainable.
4. Work with the developer, to complete remedials at the developers cost to progress to adoption.

1. Adoption: unacceptable financial and legal impact on CYC
2. Determination under clause 15 and application of clause 16: Insufficient funds available to complete works to an adoptable standard.
4. CYC has discussed working with the developer to progress remedials at their cost. The development company, FoxOak Properties Ltd, has insufficient funds to carry out the works themselves. The company sold the offices over the last decade with no other assets within the business to fund the remedials.