Triathlon Homes LLP v Stratford Village Development Partnership & Anor

Factual and Procedural Background

This appeal concerns remediation contribution orders ("RCOs") made by the First-tier Tribunal ("FTT") under Part 5 of the Building Safety Act 2022 ("BSA"). The RCOs require the Appellants, Stratford Village Development Partnership ("SVDP") and Get Living plc ("Get Living"), to pay significant sums to remedy fire safety defects in the external walls of five residential blocks in the East Village Estate in Stratford, East London. SVDP was the original developer, and Get Living is effectively the owner of SVDP.

The RCOs were applied for by the 1st Respondent, Triathlon Homes LLP ("Triathlon"), a social housing provider with long leasehold interests in the blocks. The 2nd Respondent, East Village Management Ltd ("EVML"), manages the estate and incurred costs engaging contractors for the remedial works. Due to the BSA, Triathlon is not liable for service charges related to these costs, so the RCOs require SVDP and Get Living to pay what would have been Triathlon's share of the costs to EVML, including reimbursement of costs Triathlon had already paid.

The applications were initially transferred to the Upper Tribunal ("UT") but jurisdiction was found to lie solely with the FTT. The case was re-transferred to the FTT, which made the RCOs in a detailed decision dated 19 January 2024, followed by an order dated 5 March 2024. An appeal to the UT was dismissed by consent, resulting in a leapfrog appeal to this Court, effectively hearing the appeal from the FTT’s detailed decision.

This appeal is the second of two concerning Part 5 of the BSA, with the other being the Adriatic appeal. The two appeals were heard sequentially by the same court but raise different issues. The present appeal raises two grounds: (1) whether the FTT erred in concluding it was just and equitable to make the RCOs, and (2) whether the FTT erred in concluding RCOs can apply to costs incurred before the BSA came into force on 28 June 2022.

The parties were represented by senior counsel and solicitors, including intervention by the Secretary of State for Housing, Communities and Local Government. The Court received extensive submissions and ultimately preferred the Respondents’ arguments, dismissing the appeal on both grounds.

Legal Issues Presented

1. Whether the FTT erred in concluding it was just and equitable to make remediation contribution orders against SVDP and Get Living for the costs of the Major Works.
2. Whether the FTT erred in concluding that an RCO can be made in respect of costs incurred before the relevant parts of the Building Safety Act 2022 came into force on 28 June 2022.

Arguments of the Parties

Appellants' Arguments

• The FTT wrongly created an unexpressed presumption that it is just and equitable to make an RCO against a developer or any party within section 124(3) of the BSA able to fund remediation works.
• The FTT erred in finding that the policy of the BSA places primary responsibility on the original developer and that others may pass costs on to the developer, especially given that regulation 3 of the 2022 Regulations only applies to landlords, and neither SVDP nor Get Living are landlords.
• The FTT should have considered the motive and identity of the applicant for the RCO; Triathlon’s motivation was primarily to protect itself from costs rather than the public purse.
• The FTT erred in concluding that public funding is a matter of last resort and that the public purse should underwrite the risk of failure if claims against third parties fail.
• The FTT wrongly allowed Triathlon to seek RCOs instead of pursuing other claims or potential claims available to it.
• The FTT failed to take into account that applications to the Building Safety Fund ("the Fund") were made at Triathlon’s request and that the remedial works funded were the only scope meeting the Fund's requirements.
• The FTT failed to consider that the Fund’s provision of funding was irrespective of the BSA and that public bodies did not expect SVDP or Get Living to provide forward funding.
• The FTT ignored the changing identity of the beneficial owners of SVDP and Get Living, particularly that the development was originally a public project benefiting the public through the Olympic Delivery Authority ("ODA").
• The FTT failed to consider that the Grant Funding Agreement expressly prohibits claims against Get Living.
• The FTT erred in concluding it was just and equitable to make RCOs without deferring payment until the outcome of litigation against the main contractor.
• The FTT erred in concluding that RCOs can apply retrospectively to costs incurred before 28 June 2022.

Respondents' Arguments

• The policy of the BSA is that primary responsibility for remediation costs rests with the original developer, and the hierarchy of liability excludes the taxpayer as a primary funder.
• Section 124 provides a discretionary power to make RCOs where just and equitable, and the availability of alternative recovery routes against trustees supports making RCOs against SVDP and its associates.
• The motivation of the applicant is generally irrelevant unless improper motives are shown; Triathlon has a legitimate interest as a leaseholder and landlord concerned with safety and funding.
• Public funding is a matter of last resort; the Fund should not act as interim funder while claims against third parties are pursued, and RCOs provide a mechanism to secure funding without delay or complex litigation.
• The existence of public funding and cooperation in securing it does not negate the statutory scheme allocating costs to responsible parties.
• The changing ownership and corporate structure do not affect the liability as investors assumed risks of liabilities when acquiring SVDP and Get Living.
• The Grant Funding Agreement’s clause preventing claims against leaseholders applies only to leaseholders in their capacity as such, not to claims against associates or developers in other capacities.
• Section 124’s language and the statutory scheme support retrospective application to costs incurred before the BSA’s commencement, consistent with the Act’s purpose to protect leaseholders and hold responsible parties accountable.
• The discretion to make RCOs allows the FTT to ensure fairness, preventing unfair retrospective liability where appropriate.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by examining the statutory framework of the Building Safety Act 2022, particularly Part 5 and section 124, which empowers the FTT to make remediation contribution orders when it is just and equitable. The Court emphasised the legislative purpose of protecting leaseholders from unaffordable remediation costs and ensuring those responsible for defects bear the costs.

Regarding Ground 1, the Court rejected the Appellants' contention that the FTT had created a presumption that RCOs should be made against developers or associates able to fund remediation. The Court explained that the FTT’s reasoning was grounded in the statutory scheme and policy, which places primary responsibility on developers and associates, and that public funding is a last resort. The Court accepted that the FTT properly exercised its discretion considering the facts, including the financial positions of SVDP and Get Living, the availability of public funding, and the risk of delay or uncertainty if funding awaited litigation outcomes.

The Court also addressed arguments about the applicant’s motivation and identity, concluding that Triathlon’s standing and interest were legitimate and that motivation is generally irrelevant absent improper conduct.

On the Grant Funding Agreement, the Court interpreted the relevant clause as protecting leaseholders only in their capacity as leaseholders, not preventing claims against associated companies in other capacities, thus not barring RCOs against Get Living.

Regarding Ground 2, the Court analysed whether section 124 applies retrospectively to costs incurred before 28 June 2022. It noted the presumption against retrospectivity but found it rebutted by the clear statutory language, the purpose of Part 5, and the broader legislative context. The Court relied on the Supreme Court’s URS decision, which supported retrospective application as central to achieving the Act’s objectives. The Court concluded that denying retrospective effect would produce inconsistencies and leave some leaseholders without remedy, contrary to Parliament’s intention. The Court also noted the FTT’s discretion to ensure fairness in applying RCOs retrospectively.

Overall, the Court found the FTT’s reasoning thorough, well-founded, and consistent with the statutory scheme and policy objectives of the BSA.

Holding and Implications

DISMISSED

The Court dismissed the appeal on both grounds, upholding the FTT’s decision to make remediation contribution orders against SVDP and Get Living. The effect of the decision is that the RCOs requiring these parties to contribute to the costs of remedying fire safety defects, including costs incurred before the BSA’s commencement, stand as made. The judgment reinforces the statutory scheme that places primary remediation cost responsibility on developers and their associates, with public funding as a last resort. No new precedent beyond the application of existing statutory interpretation principles and the BSA’s scheme was established; the decision confirms and applies the remedial framework set out in the Building Safety Act 2022.