Triathlon Homes LLP v Stratford Village Development Partnership & Others  UKFTT 26 (PC) 25 January 2024
1. This was the first major case in which the First Tier Tribunal (“FTT”) (made up of the President of the Lands Chamber, Edwin Johnson J, and its Deputy President, Martin Rodger KC) had to consider applications for a remediation contribution order (“RCO”) under section 124 of the Building Safety Act 2022 (“the BSA”). The decision considers a number of common arguments about the extent of the jurisdiction and the just and equitable test.
2. The applications concerned the cost of rectifying fire safety defects in five tower blocks in the former Olympic Village in Stratford, London (“the Blocks”), one application per Block. They were made by Triathlon Homes LLP (“Triathlon”), who is the long leaseholder of all the social and affordable housing in the Blocks.
3. The Blocks had been developed by the First Respondent (“SVDP”), which is a limited partnership whose three partners are ultimately owned (through subsidiaries) by the Second Respondent (“Get Living”). SVDP is also the beneficial owner of the freehold to the development.
4. Get Living did not own SVDP at the time the development of the Blocks was undertaken: at that time, the development was owned by the Olympic Delivery Authority (“the ODA”).
5. Through subsidiaries, Get Living also owns the long leases to all the private rented housing in the Blocks.
6. There was no dispute between the parties that the “jurisdictional” or “gateway” requirements which need to be met before an RCO can be made had been satisfied. There were “relevant defects” in a “relevant building”. Triathlon is an “interested person” and both SVDP and Get Living can be a “specified body corporate or partnership”. The principal issue between the parties was whether it was “just and equitable” to make the order sought in respect of the remedial work that is currently being carried out to the Blocks. In deciding that it was just an equitable order, the Tribunal found that:
6.1 The ability to apply for a RCO is a new and independent remedy, which is essentially non-fault based (paragraph 261).
6.2 It is necessary to distinguish the relevant from the irrelevant and to have regard to the purpose of sections 117 to 125 (paragraph 244).
6.3 An important factor is that the policy of the BSA is that primary responsibility for the cost of remediation should fall on the original developer, and that others who have a liability to contribute may pass on the costs they incur to the developer (paragraphs 264 and 265).
6.4 It was no answer that the remedial works were being funded by the Building Safety Fund. Given that the taxpayer does not appear in the list of people in section 124(3) against whom a RCO could be made, “it is difficult to see how it could ever be just and equitable for a party falling within the terms of section 124(3) and well able to fund the relevant remediation works to be able to claim that the works should instead be funded by the public purse” (paragraph 273).
6.5 It is not relevant to consider the applicant’s motivation in bringing the applications, their identity or the basis of their eligibility to make the application (paragraphs 246 and 271). What mattered was that Parliament had made the remedies available and that the applicant was entitled to take advantage of them (paragraph 246).
6.6 No weight should be given to the changing ultimate beneficial ownership of the Respondents in the period since the development was undertaken (paragraphs 251 to 254).
6.7 It would be an unusual case in which the source or extent of a respondent’s assets or liabilities would carry much weight when deciding whether it is just and equitable to make an RCO (paragraph 255).
6.8 The ability or inability of a respondent to pass on liability to some other party who may be responsible under the general law is not a matter to which much weight should be given (paragraph 256). However, the Tribunal has ample jurisdiction under section 124, as a condition of making a remediation contribution order, to impose such terms as are required to make the contribution just and equitable, including requiring repayment by the recipient of the contribution in the event of it successfully pursuing claims against third parties (paragraph 294).
6.9 The availability to the applicant of other claims or potential claims should not disqualify it from making a claim for an RCO or delay its determination. Parliament intended to provide a route to securing funding for remediation works without the applicant having to become involved in expensive and lengthy litigation (paragraph 261).
6.10 Parties cannot contract out of section 124 and there is nothing unfair in an applicant taking advantage of the ability to apply for an RCO independently of any contractual provisions which may exist between the parties (paragraphs 261 to 262).
6.11 In circumstances where the developer, here SVDP, would be unable to comply with an RCO in any significant sum without the financial support of its parent, here Get Living, (paragraph 230), it would be just and equitable to make an order against that party too, Get Living (paragraph 266).
7. Accordingly, the FTT decided that Triathlon was entitled to RCOs against both SVDP and Get Living in respect of the cost of rectifying the defects in the Blocks.
8. There were three additional issues which the Tribunal had to address in respect of costs which had been incurred to date, either by Triathlon or by the management company for the Blocks, East Village Management Limited (“EVML”). As to this, the FTT found:
8.1 At paragraphs 57 to 79, that it has jurisdiction to make an RCO in respect of costs that had been incurred before the BSA came into force on 28 June 2022.
8.2 At paragraphs 80 to 82, that, when considering the date on which costs are incurred, the relevant date is when the costs were incurred by the person who remedied the relevant defect.
8.3 At paragraphs 83 to 122, that an RCO can be made in respect of the costs incurred in preventing risks from materialising or in reducing the severity of building safety incidents (such as the costs of a waking watch or the installation of a temporary fire alarm).
9. It should also be noted that, as paragraphs 45 to 49 of the Judgment record, only the FTT has jurisdiction to make an RCO. It is not possible for the FTT to transfer the hearing of an RCO application to the Upper Tribunal.
You can read the judgment here.
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