“Developers First in Line” – Court of Appeal Confirms Retrospective Reach of Remediation Contribution Orders and the “Public-Purse-as-Last-Resort” Principle under the Building Safety Act 2022

Introduction

Triathlon Homes LLP v Stratford Village Development Partnership & Anor ([2025] EWCA Civ 846) is the second Court of Appeal pronouncement on Part 5 of the Building Safety Act 2022 (“BSA”). It clarifies two critical issues that had remained unsettled since the Act’s hurried passage in the wake of the Grenfell Tower tragedy:

1. Whether the First-tier Tribunal (“FTT”) may impose remediation contribution orders (“RCOs”) in respect of costs incurred before s.124 BSA came into force on 28 June 2022.
2. How the “just and equitable” discretion under s.124 should be exercised when government grants (the Building Safety Fund, “BSF”) are already financing remedial works.

The appeal was brought by Stratford Village Development Partnership (“SVDP”), the original (but now “thin-capitalised”) Olympic Village developer, and its parent Get Living plc (“Get Living”), after the FTT ordered them to reimburse or fund c. £18 million of cladding-remediation expenditure attributable to social-housing provider Triathlon Homes LLP (“Triathlon”). The Court of Appeal—Nugee, Holgate and Newey LJJ—dismissed the appeal on both grounds, thereby:

• Establishing that RCOs are retrospective: they may cover expenditure incurred at any time within the 30-year “relevant period” (s.120(3)) provided it is “just and equitable”.
• Embedding a “developers and associates first” funding hierarchy, relegating taxpayer money to a genuine last resort.

Summary of the Judgment

Ground 1 – “Just and Equitable”

• The Court upheld the FTT’s decision that it was prima facie just and equitable to place primary liability on SVDP because it was the developer responsible for the defects.
• The same conclusion applied to Get Living, its wealthy parent, under the broad “associate” test in s.124(3)(d), whose purpose is to prevent well-resourced groups from hiding behind thin SPVs.
• Public funding is a “matter of last resort”. Given that SVDP/Get Living could afford the works, the BSF should not act as an interest-free bridging facility.
• The motives or identity of the applicant (Triathlon rather than the Secretary of State or EVML) were irrelevant: Parliament intentionally granted any “interested person” standing.

Ground 2 – Retrospectivity

• Section 124’s phrase “costs incurred or to be incurred” encompasses past costs; nothing in the text, context or purpose limits the power to post-28-June-2022 expenditure.
• Denying retrospection would undermine the scheme of Part 5, creating a perverse divide between leaseholders who had already paid and those who had not.
• The Supreme Court’s reasoning in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21 confirmed that Part 5’s provisions—including s.124—were intended to apply retrospectively to secure redress for historic defects.

Detailed Analysis

1. Precedents and Authorities Considered

• Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point – Court of Appeal’s first BSA Part 5 decision (handed down the same day). Provided contextual analysis of the “remediation scheme” and leaseholder protections.
• URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21 – Supreme Court emphasised “retrospectivity as central to achieving the BSA’s aims” and the policy of holding those responsible to account. Though about limitation (s.135), the dicta were pivotal to the Court of Appeal’s view that s.124 is equally retrospective.
• Chartbrook Ltd v Persimmon Homes plc [2009] UKHL 38 – relied on during argument regarding contractual interpretation of the Grant Funding Agreement.
• L’Office Chérifien des Phosphates v Yamashita-Shinnihon Steamship Co [1994] 1 AC 486; Tunnicliffe [1991] 2 All ER 712; Granada UK Rental [2019] EWCA Civ 1032 – cited for principles on retrospective legislation and fairness.

2. The Court’s Legal Reasoning

a) Hierarchy of Liability & Public Funding

Section 124 dovetails with Schedule 8 and the Leaseholder Protection Regulations 2022 to create a “cascade” of responsibility:

1. If the developer or its associate still holds an interest, no leaseholder service charge is payable (Sch 8 ¶2).
2. Landlords who must fund works because of those protections can pass the costs upward (Regs 3-5).
3. RCOs serve as a discretionary, court-ordered shortcut—especially where complex contractual claims would delay reimbursement.

Against that backdrop, Nugee LJ endorsed the FTT’s core proposition:

“It is difficult to see why the public should fund remediation while a solvent developer or associate—squarely within s.124(3)—retains the asset and is able to pay.”

b) “Just & Equitable” Factors Clarified

The Court approved the FTT’s multi-factor matrix, giving weight to:

• Policy alignment—placing primary liability on the developer.
• Financial capacity—Get Living’s £2.6 bn property portfolio versus SVDP’s thin capitalisation.
• Public-purse reimbursement—urgency in restoring BSF monies so they can be redeployed to other unsafe buildings.
• Absence of prejudice—RCOs did not impede SVDP’s or Get Living’s right to pursue Galliford Try or others for indemnity.
• Motive immateriality—Parliament intentionally created a broad class of “interested persons”; no need to police their incentives unless mala fides is alleged.

c) Retrospectivity

The presumption against retrospective legislation yielded to:

• The express statutory language (“incurred or to be incurred”);
• The protective purpose of Part 5 (ensuring leaseholders who have already paid are placed in the same position as those who have not);
• Section 124’s embedded safety valve—the “just and equitable” test—which guards against unfairness in extreme, stale cases;
• The Supreme Court’s affirmation in URS that “all the main changes to the law made by Part 5 have retrospective effect”.

d) Contractual Bar Argument Rejected

Get Living argued that clause 4.3.1(d) of the Grant Funding Agreement barred EVML (and therefore Triathlon) from claiming against it. The Court upheld the FTT’s “optimistic interpretation” critique, holding that the clause only shields leaseholders qua leaseholders, not developers or associates who coincidentally hold leases. Interpreting it otherwise would thwart the BSA’s policy and make it possible for wrongdoers to immunise themselves simply by buying a single flat.

3. Impact Assessment

• Widened Liability Window – RCOs can now reach back 30 years (the “relevant period”) regardless of when costs were booked. Developers, parent companies, SPVs and other “associates” face exposure even where remediation predates the Act.
• Funding Sequencing – Parties cannot rely on BSF monies as a shield. Expect BSF to routinely seek reimbursement via RCO interventions or encourage applicants to launch their own RCOs.
• Due Diligence & Transactions – Purchasers of development entities (or their freeholds) must sharpen warranties and price in potential RCO liabilities—even for defects already fixed.
• Litigation Strategy – Claimants may opt for an RCO rather than conventional TCC litigation: quicker, cheaper, no fault requirement, and no need to join multiple construction defendants.
• Corporate Structuring – “Associate” breadth confirmed; directors holding cross-appointments within a group can link distant entities. Groups must audit intra-directorships and consider risk quarantining.
• Precedential Weight – While technically Court of Appeal, it sits alongside Adriatic and URS to form a trilogy that will guide the FTT and Upper Tribunal. Leave to the Supreme Court appears unlikely given harmony with URS.

Complex Concepts Simplified

Conclusion

The Court of Appeal’s decision in Triathlon Homes cements two transformative principles:

1. Retrospective Reach – RCOs bite on historical expenditure, ensuring no arbitrary temporal carve-out leaves earlier-paying leaseholders stranded.
2. Public Funds Trail Private Responsibility – Taxpayer money funds safety works only when responsible private actors truly cannot. Wealthy parents and associated companies sit unmistakably in the firing line.

Together with Adriatic and the Supreme Court’s URS, the case completes the interpretative scaffold for Part 5. Developers, investors and their financiers must now assume that:

“If you (or an associate) still own any slice of the building, you are first in line—yesterday’s costs included.”

Leaseholders and managing agents, conversely, have gained a swift, potent sword to cut through contractual and funding delays. The Tribunal’s “just and equitable” balance remains the key gatekeeper, but the scales have been recalibrated decisively in favour of building safety and public-purse stewardship.