Case No: HC-2015-000260 
Neutral Citation Number: [2015] EWHC 3448 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane
London EC4A 1NL

Date: 01/12/2015

Before :

MR JUSTICE MANN
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Between :

	(1) London Borough of Southwark
(2) City of London Corporation	Claimant	
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	Transport for London	Defendant	

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Mr David Elvin QC and Mr Richard Moules (instructed by Dentons LLP) for the Claimant
Mr Timothy Morshead QC and Mr Charles Banner (instructed by Wragge Lawrence Graham & Co LLP) for the Defendant

Hearing dates: 21st and 22nd October 2015
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Judgment
Mr Justice Mann : 
Introduction
1.	This is an appeal, with permission from Morgan J, from an award of an arbitrator, Mr John Male QC, on preliminary questions raised in two similar arbitrations under the GLA Roads and Side Roads (Transfer of Property etc) Order 2000 (SI 2000 No 1152) (“the vesting order”).  That order provides for the vesting of certain highway property in the respondent, Transport for London (TfL), in connection with the re-ordering of responsibilities for highways on the creation of the TfL and its assumption of responsibility as a highway authority for certain roads in London (“GLA roads”).  Under Article 2 of the vesting order it is provided that 

“2  Property etc transferred in relation to GLA roads
(1)     Subject to paragraph (2) and article 4 below, on the operative date there are hereby transferred to Transport for London in relation to each GLA road—
(a)     the highway, in so far as it is vested in the former highway authority;
(b)     the property mentioned in paragraph (3) in so far as, on the designation date, it was vested—
(i)     in the former highway authority for the purposes of their highway functions in relation to the GLA road, or
(ii)     in the former highway authority for the purposes of functions in relation to the GLA road under sections 6 (traffic regulation), 9 (experimental traffic orders), 23 and 24 (pedestrian crossings) and 85 (speed restriction signs) of the Road Traffic Regulation Act 1984;
(c)     all liabilities incurred by a former highway authority for the purposes of their functions in relation to the GLA road and not discharged before the operative date, other than loans and loan charges.
(2)     There is not transferred by virtue of this article—
(a)     any right or liability of a relevant authority in respect of—
(i)     work done, services rendered, goods delivered, or money due for payment, before the operative date;
(ii)     damages or compensation for any act or omission before that date;”
(iii)     the price of, or compensation for, any land purchased, or for which a contract to purchase has been concluded, before that date; or
(b)     any copyright held by the Crown; [or
(c)     all property of the Secretary of State comprised in and relating to College Farm, Fitzalan Road (including 47 and 49 Fitzalan Road), Finchley, London N3 3PG as the same is registered at HM Land Registry with title absolute under Title Numbers MX141872 and NGL 244982].
(3)     The property referred to in paragraph (1)(b) is—
(a)     land, other than land—
(i)     vested in the former highway authority for the purpose of being used for the storage of materials required wholly or mainly for the maintenance and improvement of other highways; or
(ii)     where the former highway authority is a relevant authority, held by that authority for the improvement or development of frontages to the highway, or of land adjoining or adjacent to the highway; and
(b)     all other property held in connection with the GLA road (including the unexpended balances of any grants paid by the Secretary of State to any relevant authority for the purposes of their functions in relation to the highway) other than materials to be used for the maintenance or improvement of the highway, and the unexpended balances of any loans raised by the former highway authority, or by any relevant authority for the purposes of its functions in relation to the highway.”

2.	The dispute on this appeal is as to the extent of the vesting by virtue of the expression “the highway” in paragraph (1)(a).  The London Borough of Southwark and The City of London were highway authorities for what are now GLA roads in their respective areas.  The vesting order is obviously intended to have some vesting effect in relation to those roads, and the dispute is as to its extent.  In the case of some parts of some of the highways the local authorities own not merely the top part of the soil (see below), but have full title to the whole of the freehold.  The relevant dispute is as to whether, in those circumstances, TfL acquires any more than the relevant part of the surface that it would normally have as a highways authority, though regrettably the way in which the issue has been made to arise and been decided does not articulate the point in quite that way.  There is also a dispute as to the horizontal extent of some vesting.

3.	The vesting order provides for disputes between TfL and highway authorities to be determined by arbitration (Article 8).  Mr Male is seised of an arbitration between the present parties, and the matter before me is an appeal on a point of law from his award on some preliminary issues that the parties formulated.  
The usual ownership of a highway authority
4.	What one might call the “normal” or “traditional” ownership rights of a highway authority lie at the heart of this dispute.  They are heavily relied on by the two local authorities.  

5.	It is well established where a highway is maintainable at public expense the highway authority which is responsible for it has not merely the obligation to maintain it, it also has a limited ownership (unless it has acquired ownership rights by conveyance).  That principle is set out in statute and in authority.

6.	The current statutory provision (which succeeds others) is section 263 of the Highways Act 1980 (“the Highways Act”).  This provides:

“263  Vesting of highways maintainable at public expense
(1)     Subject to the provision of this section, every highway maintainable at the public expense, together with the materials and scrapings of it, vests in the authority who are for the time being the highway authority for the highway.
(2)     Subsection (1) above does not apply—
(a)     to a highway with respect to the vesting of which, on its becoming or ceasing to be a trunk road, provision is made by section 265 below …”

7.	In Tithe Redemption Commissioners v. Runcorn UDC [1954] 1 Ch. 383 at 407 Denning LJ described the interest thus:

“The statute of 1929 vested in the local authority the top spit, or, perhaps, I should say, the top two spits, of the road for a legal estate in fee simple determinable in the event of its ceasing to be a public highway.”

A “spit” is a spade’s depth.  

8.	The vertical limits of this title are illustrated by Vestry of St. Mary, Battersea v. County of London and Brush Provincial Electric Lighting Co Ltd. [1899] 1 Ch. 474:

“It is contended that the rights of the plaintiffs are being interfered with, and this is put in two ways. It is said, first, that these electric wires are only two feet beneath the surface of the street - that is, under the foot pavement of it, and that the subsoil of the street, for the depth of at least two feet, is vested in the plaintiffs. If that is so, of course the plaintiffs are right, and this is a continuing trespass and violation of their rights of ownership. But it seems to me that the answer to that is to be found in Tunbridge Wells Corporation v. Baird … If that is so, if the pavement which the plaintiffs have vested in them carries with it only so much of the soil under this street as falls within that definition, they clearly cannot maintain this action as owners of the soil under the pavement. If that is so, one of the most formidable grounds upon which the plaintiffs base their case is disposed of.”

9.	The reasoning behind this limitation appears from Tunbridge Wells Corp v. Baird [1896] A.C. 434, per Lord Herschell at 442:

“My Lords, it seems to me that the vesting of the street vests in the urban authority such property and such property only as is necessary for the control, protection, and maintenance of the street as a highway for public use.”

10.	It is this limitation of ownership which is heavily relied on by Mr Elvin QC, for the two local authorities.  He says, in substance, that ownership of that limited extent is what TfL got under the vesting of “highways” under the vesting order, even if the highway authority in question happened to own the whole freehold.  In the interests of brevity of expression I shall call this limited spatial interest (including the necessary land referred to in Tunbridge) the “surface”, even though it extends to more than the surface.  It does not extend to the airspace above or the subsoil below.

The arbitrators questions and his answers.
11.	Substantial disputes arose between TfL on the one hand and each of the City of London and the London Borough of Southwark on the other and were referred to arbitration.  The disputes were extensive in topographical scope, particularly in relation to various holdings of property.  The land holdings of the local authorities are extensive and are capable of giving rise to all sorts of detailed factual disputes as to the effect of the vesting order.  The parties identified certain preliminary issues which, it was thought, could usefully be taken first in order to facilitate the orderly dispute of many of the detailed issues.  They were debated before the arbitrator, and he delivered a written award on them.  Two of those issues are not the subject of this appeal.  

12.	The third is.  In order to understand the questions and the answer which give rise to it it is necessary to understand some definitions.  “GLA roads” are defined in the pleadings as roads which were listed in a designation order which is referred to below.  “Southwark Roads” and “CoL” (City of London) roads are such of the GLA roads as are within the areas of Southwark and the City respectively.  The issues are defined in an extended way:

“2.  In relation to the Southwark Roads and the CoL Roads, upon the true interpretation of the Highways Act 1980, the Designation Order and the Transfer Order, as of 3rd July 2000 was there, or did there then become vested in the Claimant, highway under Article 2(1)(a) or other property under Article 2(1)(b) of the Transfer Order:
(a) only to the extent pleaded in paragraph 15 of the First Defendant’s Points of Defence and only to the extent pleaded in paragraphs 20-21 in the Second Defendant’s Points of Defence (as the Defendants contend); or
(b) those interests as well as all other interests of the Defendants in the Southwark Roads and CoL Roads respectively including any interest in their subsoil (including under legal ownership or under ad medium filum as a result of the Defendants’ ownership of land adjoining the Southwark Roads and the CoL Road as applicable) and airspace (as the Claimant contends)?
Including:
(i) What was the extent in the horizontal plane of the interest of the Defendants which passed to the Claimant in relation to the Southwark Roads and CoL Roads?
(ii) What was the extent in the vertical plane of the interest of the Defendants which passed to the Claimant in relation to the Southwark Roads and CoL Roads?”

13.	Understanding those issues fully requires the paragraphs from the Defences which are referred to in them.  They were, I am told, identical form, so I need only to set out one of them.  I take Southwark’s Defence:

“15.  For the purposes of ss. 14A-14D of the 1980 Act (as added by the 1999 Act) and for the purposes of the of the 2000 order:
(1) “highway” has the same meaning as it carries under the 1980 Act and in the general law (see s. 263(1) of the 1980 Act). It follows that what vested in TfL as GLA Road was the “top two spits” together with the materials and scrapings;
(2)  The subsoil beneath any highway transferred as GLA Road does not vest in TfL except such as may be necessary for the reasonable exercise by the highway authority of its duties and powers as highway authority;
(3)  The airspace above any highway transferred as GLA Road does not vest in TfL other than that necessary for the operation of the highway as highway and the reasonable exercise by the highway authority of its duties and powers as highway authority;
(4)  The horizontal extent of highways transferred to TfL as GLA Road did not exceed the extent of the highways immediately prior to their vesting in TfL, applying the meaning of highway within the 1980 Act and general law.”
14.	The arbitrator answered the questions as follows:

“265.  I determine these issues as follows:
2.  So far as concerns the GLA Roads and subject to my decision on issue 3 in relation to the City:
(1) Vertical plane:
(a)  the top two spits of the highway and the necessary land vested in TfL on the 3rd July 2000; 
(b)  all the other airspace and subsoil of the highway vested in TfL on the 3rd July 2000 under Article 2(1)(a) of the Transfer Order (if and in so far as the former highway authority had any such interest in that other airspace and subsoil as at the 22nd May 2000), but subject to the obligations etc. in Article 5 and subject to (c) below;
(c)  in some instances particular layers or slices of subsoil and/or airspace (for example, certain structures) may have received or acquired a separate identity by the 22nd May 2000 such that they could not properly be called, and would not pass as, “the highway” under Article 2(1)(a); in such cases no vesting in TfL under Article 2(1)(a) occurred on the 3rd July 2000;
(d)  but absent such instances, all subsoil and airspace above and below the highway owned by the Councils on the 22nd May 2000 vested in TfL on the 3rd July 2000 subject to the obligations etc. in Article 5;
(e)  the identification of such instances as are mentioned in (c) is a matter for agreement between TfL and the Councils in accordance with the principles explained in this award or, absent agreement, determination by arbitration.
(2)  Horizontal plane:
(a)  the lateral extent of the highway vesting in TfL under article 2(1)(a) on the 3rd July 2000 corresponds to the land over which the highway existed as at the 22nd May 2000;
(b)  other land may also have vested in TfL under Article 2(1)(b)(i). The conditions (i)-(iii) below must be met, in relation to such land:
(i) such land was originally acquired or appropriated by the Councils for the purposes of their highway functions in relation to the GLA Road;
(ii) such land remained vested in the Councils as at the 22nd May 2000 for the purposes of their highway functions in relation to the GLA Road; and
(iii) such land was not appropriated (either express or inferred) to some other purpose prior to the 22nd May 2000 and nor was there a change of circumstances such that the land could no longer properly be described as held by the Councils for the purposes of their functions in relation to the GLA Road.”

15.	The determination of those issues did not take place on the footing of any particular assumed or found facts.  In my view that approach, and the approach taken to the definition of the issues, has led to difficulties.  There were two principal areas of dispute - the extent of first the vertical and second the horizontal limits on land on which there was a highway and of which the two local authorities had more than just the spatially limited interest in the surface given by a combination of statute and its interpretation by the courts.  TfL has laid claim to the whole of the freehold (including subsoil and airspace) in a general way, though apparently accepting some limits in some cases.  I also suspect that it has laid horizontal claims to land which the two local authorities regard as excessive.  The two local authorities submitted that the interest taken by TfL did not extend to what Mr Elvin QC, who appeared for them, described as the traditional definition of “highway” - essentially the surface.  Despite the fact that it is apparent that the plethora of landholdings by the two authorities present a very significant  number of potential variations in relevant circumstances (as it seems to me) the matter was approached on a level of generality.  This is particularly apparent from the two sub-questions (i) and (ii).  I have to say that I strongly question the wisdom of that approach, particularly in relation to disputes as to the horizontal extent of the vesting.  It seems to me it would have been much wiser to address the questions that arose on this limb of the arbitration on the footing of some clearly assumed facts, or better still some real sample instances out of the large number of holdings that were potentially relevant.

16.	Be that as it may, the parties did what they did, and the arbitrator delivered his award.  In fact, as the appeal progressed, part of a relevant factual assumed background emerged as the basis of the dispute.  In some instances the local authorities may have acquired a title of the nature referred to above, solely by virtue of its becoming the highway authority (and thus becoming liable to maintain it) without acquiring any full freehold in the land.  There is no dispute about the effect of the vesting order in that situation.  TfL gets the limited freehold in the surface that I have identified above, and nothing more, vertically, horizontally or in terms of estate.  However, in other instances the local authorities have the actual freehold in the land on which the highway is situated.  For example, it may have acquired a stretch of land by compulsory purchase for highway purposes, and built, or extended, a highway upon it.  The essence of the dispute here is as to whether, under the vesting order, TfL takes merely the surface (the local authorities’ case) or the whole of the freehold vertically and horizontally (TfL’s case).  Thus there were, and are, two impliedly assumed facts for a situation in which the relevant dispute arises - that the local authority holds the freehold in the land on which the highway is situated, and that it holds it, or at least held it, for highway purposes.  The debate before me took place on those assumptions.  

17.	The general effect of what the arbitrator decided was as follows.  So far as the vertical consequences of vesting go, the principal effect of his rather elaborate determination, which is challenged on this appeal, is that the vesting order vests the whole of the freehold in TfL (if the local authority had it before the vesting date) unless something had happened to divorce the surface from the subsoil and airspace in terms of the purpose for which the land was held.  

18.	So far as the horizontal consequences are concerned, the award seems to say that the horizontal effect of the vesting is that it operates on the highway, which does not seem to answer any question at all.  Indeed, in the remainder of the award one struggles to ascertain what the issue was in relation to the horizontal plane.  In paragraph 164 the arbitrator merely observes that what he had said about the vertical plane applied to the horizontal plane.  That does not help, because the main issue about the vertical plane (whether “highway” in Article 2 extended beyond the surface) cannot, of its very nature, extend into the horizontal plane.  As will appear, there seems to be nothing in this part of the appeal once one has determined the questions arising in relation to the vertical plane.

The arbitrator’s reasoning
19.	The arbitrator’s reasoning started from what he said was a provisional view of the vesting order to the effect that TfL was right in its contentions. He describes TfL’s contentions as being that TfL takes “the full interest … in the vertical plane of Southwark and the City of London in their GLA roads”, and that “the full interest in the horizontal plane of the Southwark and the City in their GLA  Roads also transferred to it …” (para 78).  He then goes on to give 5 reasons for that which I can summarise as follows:

(i)  A comparison of the consequences of the rival contentions favours TfL’s case. If the local authorities were right then, starting from a case where the freehold of the road was owned, only the surface of the actual highway would vest, leaving split layers of subsoil, surface and airspace being separately owned.  That is a complication that Parliament is unlikely to have intended.

(ii)  The words “in so far as it is vested in the former highway authority”, added to the word “the highway” in the vesting order suggested that TfL was intended to step into the shoes of the local authorities to the full extent of the property in the roads vested in the local authorities, whether that be the surface or the full freehold interest.  The words required an inquiry as to what it was that was vested in the local authorities, and that is what passed.  If the local authorities were right in their construction the words “in so far as vested in the former highway authority” were otiose.  

(iii)  The underlying purpose of the vesting order seemed to the arbitrator to be to enable TfL to step into the shoes of the two highway authorities.  It was unlikely that Parliament would have intended that one owner should be replaced by two (in the case of the ownership of the freehold).  This is, on analysis, another way of putting point (i).  

(iv)  Various statutory provisions pointed the same way, or pointed against the highways authorities being right.  If the vesting order had the effect of merely vesting the surface in TfL, it was otiose because section 263 of the Highways Act did that anyway.  He rejected a complex analysis of other provisions advanced by Mr Elvin which sought to demonstrate that a vesting order which vested only the surface still did useful work.

(v)  He stood back and considered the overall effect of the respective cases.  He repeated that it was hard to believe that  Parliament would have intended the diversity of ownership that would follow from the local authorities’ arguments.

The rest of the legislative background
20.	There is some more legislation that is relevant to the arguments, and it will be convenient if I set it out here.

21.	Mr Elvin helpfully set out the historical background to the vesting order.  It lies in the dissolution of the Greater London Council in the 1980s.  Before its dissolution London roads were divided up between 3 authorities.  The GLC was the highway authority for metropolitan roads, the Secretary of State was responsible for trunk roads and the various local authorities were highway authorities for the remainder.  When the GLC was dissolved most metropolitan roads were turned into trunk roads, and the remainder fell under the authority of the various local authorities.  

22.	In 1999 Parliament re-created a London-wide authority, the Greater London Authority.  It did so by means of the Greater London Authority Act 1999 (“the GLAA”).  The Department of the Environment provided some Explanatory Notes to that Act, and it was common ground that I could read those notes in order to understand what Mr Elvin called the “context” of the Act.    Mr Morshead QC, who appeared for TfL,  did not oppose my reading those notes.  

23.	Paragraph 22 explains that a single body (TfL) is to unify responsibility for transport in London and would take over the functions of other transport bodies.  Paragraph 24 says it would be responsible for road maintenance and traffic management on “GLA roads” - essentially many main roads.  Paragraph 378 explains that initial GLA roads would be designated by the Secretary of State, and other roads could be added subsequently (as will appear below).  TfL is made the highway authority for GLA roads.  Paragraph 377 records that “One purpose of the Act is to reduce the number of roads designated as trunk roads in London and to create a network of key roads for which the GLA [it ought to have said TfL] will be the highway authority.”

24.	The vesting order vests by reference to “each GLA Road”.  That expression is defined (in Article 1) as meaning “a highway designated as a GLA road under section 14A of the Highways Act 1980.  That particular section (added by The GLAA as part of the legislation creating the new governmental structure) gives the Secretary of State power to designate “highways or proposed highways as highways which are to be GLA roads”.  Orders under this section could be made at any time before the beginning of the term of office of the first Mayor of London.  As will hereafter appear, the Mayor gets a similar power after that time.

25.	The order made by the Secretary of State was the GLA Roads Designation Order 2000 (2000 No 1117) (“the Designation Order”).  It simply designates the highways referred to in the schedule to the Order as GLA Roads, as from 3rd July 2000.  The Schedule contains a list in which the highways are briefly described.  By way of example, the first is the A1, which is described thus:

“A1 from where it crosses the boundary of London to the south East side of its junction with Wakley Street including the roads which comprise the Archway Interchange.”

26.	All other designated highways are described in a similar fashion.  The purpose of the Designation Order is to recategorise some existing roads. The highways in question are described in general terms by reference to their being roads) which run from A to B.   Although section 14A and the Designation Order do not say so, the overall pattern of legislation makes it clear that the purpose, or at least part of the purpose, is anticipation of the change of control and obligations over those highways which was achieved by the vesting order.  

27.	Highways Act section 1(2A) (inserted by the GLA) makes TfL the highway authority for all GLA roads.

28.	Against that background one then turns to the vesting order.  In it one starts with the “GLA road”, that is to say the road whose designation was changed.  “In relation to” that “road” two categories of things are vested:  first, “the highway, in so far as vested in the former highway authority”; second, certain other property; and third, certain liabilities.  The second and third items are qualified by reference to their being vested in the local authority qua highway authority.  There is, in my view, a strong sense of an intention to vest everything that the local authority had qua highway authority, whatever that was.  
Arguments and conclusions
29.	At the heart of Mr Elvin’s case is a proposition which depends on what he describes as a definition.  He relies on the fact that the vesting order uses the word “highway”, and says that that word is defined in the Highways Act in a limited way to mean the surface; or alternatively that that was the general understanding of what a highway was.  He says that since the vesting order was made under that Act, the two words should be used in the same sense, and indeed that sense is one which has been adopted as a definition by previous courts.  The definition is to be found in section 263 and in the previous pronouncements of courts which have determined the extent of land vested in authorities which are obliged to maintain the highway.  He originally treated what was said in section 263 and elsewhere as actually a definition of “highway”, but later accepted that it was not actually a definition, but it nonetheless demonstrated the normal consequences of using the word “highway” which Parliament should be taken as having adopted.  

30.	In support of this line of argument Mr Elvin also relied on section 265 of the Highways Act and what Mr Lewison QC (as he then was) said about it in Secretary of State v Baylis (Gloucester) Ltd (2000) 80 P&CR 324. This is particularly significant to his case because the draftsman used the same formulation as exists in section 265 when he came to draft the vesting order.  In that case a landowner, by memorandum, agreed with the highway authority that he would “give up and dedicate to the public” a strip of land to the intent that it would become part of the highway,  The authority agreed to make it up as part of the highway.  That was never done. One of the questions that arose in the case was the consequences of that, so that the judge could determine whether there had been a breach of conveyancing obligations on a later transfer of the strip.  At pages 335-6 he considered what the effect of land becoming a highway was:

“Effect of land becoming part of the highway
Two consequences flow from the land becoming part of the highway maintainable at the public expense. First, public rights of way exist over it. Second, under section 226 of the Highways Act 1959.: 
“… every highway maintainable at the public expense together with the materials and scrapings thereof, shall vest in the authority who are for the time being the highway authority for the highway …”
The reason why the surface of the land vests in the highway authority is that it is necessary for it to do so in order that the authority can perform its statutory obligations to repair and maintain the highway.  As I have said, the highway was designated a trunk road on April 1, 1977. The effect of “trunking” a highway is that the highway vests in the Minister (now the Secretary of State).   The extent of the vesting is such part of the land as is necessary for the highway authority to perform its statutory functions. It has been described as the “top two spits”.  The nature of the interest vested in the highway authority is a determinable fee simple, so that it is a legal estate recognised by the Law of Property Act 1925.  Subject to that vesting, the owner's ownership of and rights over the land remain. He is entitled to the sub-soil, to minerals under the highway, and so on.”

31.	A footnote in the report reveals that the “trunking” was by virtue of the then equivalent of section 265.   That section, so far as material, reads:

“265  Transfer of property and liabilities upon a highway becoming or ceasing to be a trunk road
(1)     Where a highway becomes a trunk road, then, subject to the provisions of this section, as from the date on which the highway becomes a trunk road (“the operative date”), there are transferred to the Minister [or the strategic highways company, whichever is highway authority for the trunk road,] by virtue of this section—
(a)     the highway, in so far as, immediately before the operative date, it was vested in the former highway authority,
(b)     the property mentioned in subsection (3) below, in so far as, immediately before the operative date, it was vested—
(i)     in the former highway authority for the purposes of their functions in relation to the highway, or
(ii)     in a council for the purposes of functions in relation to the highway under any enactment to which this section applies, and
(c)     all liabilities incurred by any such authority or council for the purposes of their functions in relation to the highway and not discharged before the operative date, other than loans and loan charges,
and the highway and other property so transferred vest, by virtue of this section, in the Minister [or the company].
(2)     There is not transferred to the Minister [or a strategic highways company] by virtue of this section any right or liability in respect of—
(a)     work done, services rendered, goods delivered, or money due for payment, before the operative date, or
(b)     damages or compensation for any act or omission before that date, or
(c)     the price of, or compensation for, any land purchased, or for which a contract to purchase has been concluded, before that date.
(3)     The property referred to in subsection (1)(b) above is—
(a)     land, other than land—
(i)     vested in the former highway authority for the purpose of being used for the storage of materials required wholly or mainly for the maintenance and improvement of other highways, or
(ii)     acquired for the improvement or development of frontages to the highway, or of land adjoining or adjacent to the highway, and
(b)     all other property, (including the unexpended balances of any grants paid by the Minister to the former highway authority, or to any council for the purposes of their functions in relation to the highway), other than—
(i)     materials to be used for the maintenance or improvement of the highway, and
(ii)     the unexpended balances of any loans raised by the former highway authority, or by any council for the purposes of their functions in relation to the highway.”

32.	Mr Elvin relies on the virtual identity of wording with that in the vesting order, points out that the vesting order was made under the Highways Act and relies on section 11 of the Interpretation Act:

“Where an Act confers powers to make subordinate legislation, expressions used in that legislation have, unless the contrary intention appears, the meaning which they bear in that Act.”

33.	Pulling all those points together, he submitted that this case demonstrated a degree of consistency as to what vested in highways authorities.  He said that this case dealt with what the Secretary of State got under section 265 (which was in line with what generally vested in highways authorities).  If that is what happened under section 265 then consistency required that the same should happen under Article 2 of the vesting order.

34.	I reject that line of argument.   As Mr Elvin was forced to concede, section 263 and its predecessors do not define what is meant by “highway”.  Section 263 deals with what part of the land vests in the highway authority when a road is maintainable at public expense, and by virtue of that obligation.  In Baylis Mr Lewison was setting out the basic law as to the estate which highways authorities generally got by virtue of their obligations, because the existence of some estate was relevant to the extent to which the vendor in that case was liable for not having given full title and vacant possession.  What he was doing is apparent from his first sentence – he is setting out consequences.   He was not pronouncing on the construction of “highway” in his then equivalent of section 265.  There was never any question in that case of the Secretary of State ever getting any more than the surface, because the highway authority itself had not acquired a greater interest in the first place.  The memorandum was a dedication as a highway, not a conveyance of a freehold, so once the highway was dedicated, and the local authority assumed its responsibilities, what vested by virtue of those responsibilities was the surface.  When the road was trunked the Minister could not acquire any more than the local authority had, and that is what section 265 provides.  Mr Lewison did not have to consider the question of what would have vested in the Minister if the preceding highway authority had had an estate larger than the “normal” estate because that question did not arise on the facts of his case.  In the sentence beginning “The extent of the vesting …” Mr Lewison was not pronouncing on what the Minister generally got when a road was trunked; he was pronouncing on what a highway authority generally got by virtue of its being the highway authority.  The vesting order in the present case raises a different point - what vests under this highway transfer provision in a case where the transferring authority has more than the surface.  That was not Mr Lewison’s point. 

35.	In the circumstances Mr Elvin loses one of the main underpinnings of his argument.  Baylis does not support what is meant by “highway” in the statute, and it does not demonstrate that in section 265 “highway” means the surface and no more.   Accordingly the interpretation point that arises in this appeal has to be decided with the above principles of highway law as part of the background, but not as factors going directly to the meaning of “highway”.  

36.	I prefer to start my approach to the question with a consideration of the apparent purpose of the legislation.  Before it took effect the local authorities owned roads in (it is to be presumed) various ways.  In relation to some it will have owned the freehold.  In relation to those, they presumably held some as highway authority, having acquired them for the purposes of their highway functions (or having inherited them from predecessor authorities carrying out the same functions under more historic legislation giving effect to previous local government and highway reorganisations).  In relation to some freeholds it may have been the case that part of the land was not held, or came not to be held, for highway purposes.  Where that is the case it is no part of TfL’s case that such land was held in its entirety as part of the highway, since it conceded (as the arbitrator determined) that such patently non-highway parts were not within Article 2 (for example, a shooting range which apparently exists under the approach to Blackfriars Bridge).  In respect of other highways the authority may have had no more than what I am calling the surface.  But in all these cases the authorities held land as highway authority, or for the purposes of their highway functions.

37.	I then consider the reorganisation as a whole against the background of those different sorts of holdings.  The scheme has three relevant elements.  First, the recategorisation of roads as GLA roads by the Designation Order.  Second, there is making TfL highway authority for the GLA roads - section 1(2A) of the 1980 Act (added by amendment) achieves that.  Third, there is the vesting of property by the vesting order.  I think that one can detect an overall pattern from this structure.  That pattern is that TfL stepped into the shoes of the local authorities so far as the highways were concerned.  That is obviously the case in a situation where the local authorities had hitherto held just the surface and no more - there is no real dispute about that.  But in my view it is also the case where the highway authority held more than that, pursuant to its highway functions.  At this level one cannot detect any level of refinement about the process.  The object was to move roads and functions.  The roads are described in the designation order in a broad brush way.   The functions are transferred by re-designation of the highway authority.  And the vesting order transfers land pursuant to that general overall scheme.  In using the words in Article 2(1)(a)  “insofar as it is vested in the highway authority” I consider that Parliament was not only intending to convey the “nemo dat quod non habet” concept, but was also giving an indication that it was intending to vest land held qua highway authority, whether the surface or a wider holding.  

38.	This was part of the arbitrator’s reasoning, spread over several sections of his award, and I agree with him.  A further aspect of the point is another point made by the arbitrator.  If Mr Elvin’s argument were right then there would be the potential for a series of split holdings  - TfL would get the surface, and the land below and the air above (or the air above a certain height) would remain vested in the local authority in question, notwithstanding that it originally held those planes as highway authority.  It is not easy to divine any good reason why that should have been Parliament’s, or the draftsman’s, intention.  I acknowledge, of course, that there remains the possibility of this sort of split holding where the highway authority may not hold the entire land qua highway authority, but that does no more than reflect the sort of situation which exists in dedication cases like Baylis.  It does not mean that Parliament intended to create the potential for “layering” on as wide a scale as Mr Elvin’s submissions would give rise to.  Mr Elvin identified the purpose of the vesting order as being to enable the vesting of GLA roads so as to enable it to carry out its functions as highway authority, and that did not require more than the surface to vest in it.  If one identifies that as the narrow purpose, and then applies a narrow view of what that requires, then Mr Elvin might well be right.  However, I consider that it misidentifies the purpose, and is too narrow a view.  The “layering” it would give rise to points against it.

39.	What I think is the correct view produces a state of affairs which is consistent with the remainder of Article 2 in achieving a sensible scheme and which explains the use of the word “highway”.  The scheme of the Article seems to be to confine the vesting to property (and liabilities, but it is unnecessary to deal with those) which is related to a GLA road.  The first element to be transferred is the “highway” element, that is to say the part that falls with in the description of the road in the Designation Order and over which there are public rights of passage.   Next there is other “land” which is held for the purposes of highway functions relating to that road (but not other roads - see Art 2(3)(i)).  It is an unfortunate aspect of the way in which the preliminary questions were designed and agreed that this debate is not taking place in relation to real-life examples of these situations, but one can perhaps imagine land acquired for road-widening not all of which turned out to be used.  The surplus land would be capable of passing, depending on how it should be treated as having been held (whether for highway purposes or otherwise) at the operative date in 2000.  However, other land at the edges is excluded if intended for improving frontages or adjoining land - Art 2(3)(a)(ii).  Thus “highway” is used not to indicate some rather artificial vertical limits to the vesting, but to describe the “road” bits rather than the “ancillary” bits.

40.	In fact these considerations throw up another reason for rejecting Mr Elvin’s analysis.  Take the case where the local authority has acquired the freehold of land used for a highway but does not use it all for the actual highway but it remains as ancillary land, acquired and held for highway purposes for the purposes of the road itself, alongside the road, but it is not part of the highway.  That ancillary land would vest to its full extent vertically and horizontally under  Art 2(1)(b).  I do not see how the contrary could be argued.  However, if Mr Elvin were right the highway would not - only the surface would vest.  That seems to me to an anomalous result.  TfL’s case avoids that anomaly.  

41.	Mr Elvin himself relied on the reference to land in paragraph (3), and submitted that if “highway” in Article 2(1)(a) carried what he called an “extended meaning” then it would overlap considerably with Article 2(1)(b).  I do not think that it would.  The two parts of the Article would work side by side perfectly sensibly.  

42.	Those are conclusions which I think can properly be reached on the footing of the provisions read in the relevant statutory and historical context.   However, Mr Elvin provided a different statutory context which he said required a different reading.  He drew attention to the following points.

43.	First, in his skeleton argument he drew attention to Article 6 of the London Government Reorganisation (Property etc) (No.2) Order 1989 (SI 1989/1799).  This was another part of the legislation giving effect to the abolition of the GLC and dealing with the destination of certain property.  It reads:

“6  Highways Subsoil
All interests of the Residuary Body in the subsoil of existing highways acquired for highways purposes on or before 1st April 1974 by the Greater London Council or its predecessors, other than those specified in Schedule 2 to this order, shall vest in
(a)     the London Borough council in whose area such subsoil is situated; or
(b)     where such subsoil is situated in their area, in the Common Council of the City of London.”

He invoked this provision to demonstrate that there was no reason to suppose that the vesting order was intended to vest subsoil automatically, in the absence of an equivalent provision in the vesting order.  

44.	Mr Elvin’s point might have some force if one could identify a sufficiently systematic legislative and factual context from which one could reasonably clearly see that the omission of such a provision in the vesting order was significant because its effect had tended to be provided for expressly in the past.  However, that cannot be easily demonstrated.  With the assistance of a table of some historic legislative provisions provided by Mr Elvin I have sought to follow the fate of highways from the Metropolitan Board of Works, through the LCC, into the GLC, round the Greater London Authority and thence into councils or the various residuary bodies to which various bits of property went, including the London Residuary Body.  It is not an easy task, and I was not given the assistance of counsel in doing it.  However, what I can say is that the complex branching provisions do not enable one to come to the conclusion that the scheme for re-allocating highways on the break-up of the GLC can be seen to be one which demonstrates an overall intention to separate surface from subsoil, or at least there is no scheme which one can sufficiently clearly map on to the vesting order regime so as to demonstrate that when Parliament intends to vest subsoil it does so in clear terms which are significantly absent in the vesting order (and elsewhere).  I have not quite managed to work out why it was necessary to enact Article 6, but it is apparent enough that it is a sort of catch-all provision which a draftsman thought was necessary to pick up some bits and pieces that might otherwise have had no home.  That does not assist Mr Elvin.

45.	One of the points taken by the arbitrator was that if Mr Elvin was right then Article 2(1)(a) was otiose because TfL would acquire the surface by a combination of Highways Act section 1(2A) (making it the highway authority for GLA roads) and section 263 (vesting the surface in highways authorities) - Award para 126.  He indicated that this pointed to the fact that the vesting order must have been intended to do something more than merely vest the surface.   

46.	For my part I do not think that that is a strong point.  I think it very unlikely that, even if he had intended Mr Elvin’s effect, the draftsman would have been content to leave the vesting to section 263 when he had other vesting to deal with anyway, and would always have been likely to have included some express wording explicitly to cover the vesting of the highway, whatever the extent of that concept.  However, the rejection of the Arbitrator’s point does not affect the conclusion which it supported.

47.	Mr Elvin’s response to this point was to embark on a tortuous statutory analysis, in order to demonstrate that was a potential lacuna in the legislation which justified the safe approach of providing expressly for the vesting of the surface to make sure that all surfaces reached the right home (TfL).  His argument can be summarised as follows.  

(a)  Highways Act s14A(2)(b) permits the designation of a highway as a GLA road and provides for “de-trunking” of trunk roads (not a word which appears in the statute, but one which was used frequently at the hearing) in that event - the Secretary of State ceases to be the highway authority for that road.  
(b)  That de-trunking occurred on the Operative Date of the designation.
(c)  Section 263 (vesting of the surface in a highway authority for the time being) does not apply when a trunk road ceases to be a trunk road - see section 263(2)(a).  Section 265 deals with that situation.
(d)  Section 265(7) provides that when a road is de-trunked the preceding provisions of the section (which, inter alia, vest the trunk road “highway” in the Minister) apply in like manner so as to vest the de-trunked “highway” in the “council” which becomes the highway authority.  
(e)  Highways Act section 329 defines “council” as “a county council or a local authority”, and TfL does not fit within that description.  
(f)  It would therefore seem that additional vesting provisions were necessary in that context, to make sure that TfL acquired what it would not otherwise get in respect of this category of GLA roads (former trunk roads), and the vesting order was created accordingly.  

48.	I pay tribute to the ingenious nature of this argument, and the assiduity which gave rise to it, but I do not consider it to have the force attributed to it by Mr Elvin.  The arbitrator dismissed this argument on a timing point which is not supported by Mr Morshead, but irrespective of that I do not consider it likely that the statutory analysis of Mr Elvin is likely to be the reason underlying Article 2(1)(a) so as to give it work to do beyond section 265.  As I understand it, not all the GLA roads were trunk roads (no-one identified to me which were and which were not), so Mr Elvin’s argument does not apply to all the roads.  I think that if the draftsman had really had the intention to deal with the specific point that Mr Elvin has raised he would have adopted a different drafting technique which addressed it specifically rather than the globally-addressed scheme that was used.   

49.	Mr Elvin went on to suggest other reasons why the vesting order, which (on his case) had no effect wider than section 263(1), was nonetheless a necessary or useful step.  He pointed out that it contained provisions for agreement in Article 4, and provisions for arbitration, none of which would apply to a straight  section 263 transfer.  He also pointed out that section 263(1) applies only to highways maintainable at public expense, whereas Article 2(1)(a) is not so limited.  The existence of those provisions could, he said, explain why Parliament created a vesting order which, in terms of its vesting, did not go farther, spatially speaking, than section 263.  I accept that those provisions exist, and that they provide glosses on any putative application of section 263 if it were the operative vesting provision, but those additional provisions are merely consistent with Mr Elvin’s submissions as to the meaning of “highway” and his supporting arguments.  They do not add weight to them.

50.	Next Mr Elvin invoked what he said was the purpose of the vesting order which he said delineated its scope.  He pointed out that it was made under the GLA, whose stated purpose was (inter alia) “to make provision for transport and road traffic in and around Greater London”, and achieving that objective required the vesting of the surface, and such other ancillary property which vested under Article 2(1)(b).  It did not require the vesting of more than that, and therefore the order should be interpreted in his fashion, which contained appropriate limitations.  To hold otherwise would be to deprive other public bodies of land which they hold for other public functions, and he listed planning, education and housing. 

51.	I am afraid that I do not entirely follow Mr Elvin’s reasoning on this point.  If land is held for one of those other purposes then it would be unlikely to be caught by the vesting of “the highway” in relation to a GLA road.  I agree that part of the purpose of the 1999 Act, and indeed of the vesting order itself, was to make provision for traffic and the like, but in the circumstances I consider that the more likely intention, in order to achieve that, was to vest the entirety of the freehold where the highway authority holds it as highway authority, rather than slicing it up as Mr Elvin suggests.

52.	Mr Elvin then relied on what he said would be an inconsistency in the statutory regime were TfL to be correct.  Highways Act section 14B  provides for the redesignation of a road (other than a trunk road) as a GLA road, and for a GLA road to cease to be such a road, in each case after the appointment of the first Mayor of London.   The Mayor of London has power to determine whether those events should happen.  If the former happens then TfL becomes the highway authority (section 1(2A)).  Section 266B of the Highways Act deals with some of the consequences of that.  Subsections (2) and (3) vest property (including land) which was vested in the former highways authority for the purposes of the highway in question, in the same sort of terms as Article 2(1)(b) and section 265(1)(b) and (2).   There is no provision for the specific vesting of “the highway”, the equivalent of Article 2(1)(a) or section 265(1)(a).   That means that the vesting of the highway itself has to depend on section 263, which gives TfL or the local authority (as the case may be) only the surface.  That, Mr Elvin says, would give rise to an inconsistency if the vesting order had the effect contended for by TfL.  Under the vesting order TfL would get the whole available freehold; but if the redesignation as a GLA road happens in the future it would get only the surface (plus any dependent land under section 266B).  This inconsistency would be avoided if Article 2(1)(a) had the more limited effect he contended for - TfL would get  no more than the surface whether the road became a GLA road under the Designation Order, or whether it was subsequently designated by the Mayor.

53.	I agree that these provisions are capable of producing an inconsistency with the vesting order if the latter has the effect found by the Arbitrator.  It may be more apparent than real in some cases, because section 266B may carry more of the freehold anyway, but it is still a potential inconsistency.  I accept that interpretations that avoid inconsistencies are more likely to be preferred.  However, it is not determinative, and is no more than an indication of the intention of Parliament.  I do not think that this inconsistency, in an area riddled with complicated interlocking (or perhaps not quite interlocking) statutory  provisions is of much weight when placed beside the more purposive considerations, identified above, which point away from Mr Elvin’s case.

54.	In all the circumstances I do not consider that the arbitrator erred in law in proceeding on the footing that Article 2(1)(a) carried with it the freehold, or other estate, vested in the local authorities as highway authorities, and, in the vertical plane, that it was not confined to what I am calling the surface.  The arbitrator took the view that that conclusion required the precise answer to the preliminary question 2(1) (the vertical plane) that I have set out above.  I do not understand that, given his views as to the scope of the vesting, there is any attack on his precise formulation of the answer.

55.	I can deal briefly with the horizontal plane, not least because it was not clear to me what difference there was between the parties once one had answered the bigger question about verticality.  In terms of the horizontal scope of Article 2(1)(a), it must extend to what is properly called the highway, but not into land which cannot properly be called  the highway.  That seems to be what the arbitrator found.  As such his finding would seem to beyond reasonable challenge, but in practice it does not answer any useful question.  The sort of issues capable of arising in the vertical plane can be imagined in the abstract - basically the issue is whether, in the event of the highway authority in fact holding the freehold, TfL gets any more than the surface.   In relation to horizontal extent there is apparently no equivalent of that general issue.  The issues that are likely to arise in the horizontal plane are going to be fact-specific.  That is doubtless why, as I was told at the hearing, there was not much focus on horizontal issues at the arbitration hearing.    The arbitrator did not seek to address any generalised issues, and, given my answer to the verticality point, I did not detect that there would be any challenge to answer (a)  about the horizontal plane, and indeed Mr Elvin confirmed early on in his opening that he did not have a problem with answer 2(2)(a) in relation to horizontality.

56.	There is, however, one point of clarification to make.  The preliminary question at paragraph 2(b) asks whether TfL picks up subsoil “(including under legal ownership or under ad medium filum as a result of the Defendants’ ownership of land adjoining the Southwark Roads and the CoL Road as applicable)”.  Mr Morshead made it clear at the hearing that his client was not laying claim under the vesting order to subsoil to the highway which was vested in the local authorities in their capacities as owners of adjoining properties (“ad medium filum”).  His claim related to land acquired for or appropriated to highway purposes.  To the extent that the arbitrator might be thought to have ruled otherwise he did not seek to defend or rely on the ruling.

57.	The last area of dispute concerns the arbitrator’s findings about Article 2(1)(b)(i).  The arbitrator made some determinations about the operation of that clause as appears in his answers to the questions.  Mr Elvin’s case, advanced in his skeleton argument but not developed at the hearing, was that those questions omitted an additional factor.  Before the arbitrator, and in his skeleton argument, he submitted that there was an additional requirement for the application of that article, namely that the additional property which vested should be only such property as is necessary or reasonably required for the function of the GLA road in question.  The arbitrator rejected that additional requirement (see paragraph 186 of his award) and it is therefore not recorded in his answer to the questions.  Mr Elvin seeks to maintain his position on this appeal, namely that that requirement existed.  

58.	I can see no basis for finding that that additional requirement existed.  As the arbitrator pointed out, the Article requires a factual inquiry as to whether land was vested in the local authority for the purposes of its highway functions.  The arbitrator accepted that there had to be a functional connection, and that is obviously correct, but it raises just a question about actual function.  There is no case, on the wording of the Article, for engrafting a further requirement of necessity or reasonable requirement.  Nor is it possible to detect any underlying purpose which would justify such an implication.  The purpose of the legislation, as I have observed, is to vest in TfL the highways and highways-related property which the local authorities themselves held as highway authorities.  It is a shoe-swapping exercise.  It is impossible to ascertain what the purpose of adding a necessity or “reasonably required” requirement would be, and indeed such a requirement would probably be inimical to the overall purpose.  I would also observe that it strikes me that it would be a very difficult test to apply in many cases.  I therefore reject that part of the appeal.

Conclusion
59.	It therefore follows that this appeal falls to be dismissed.