A recent decision in Grey GR Limited Partnership v Edgewater (Stevenage) Limited and others CAM/26UH/HYI/2023/0003 offers helpful guidance on the First Tier Tribunal’s (FTT’s) application of the “just and equitable” test for remediation contribution orders (RCOs) introduced under the Building Safety Act 2022 (BSA).
Background
Grey GR Partnership Limited (Grey) purchased Vista Tower (a 16-storey residential block in Stevenage) from Edgewater (Stevenage) Limited (Developer) in 2018. Subsequent investigations revealed a range of fire safety defects. Most of the internal defects were remediated in 2023 at Grey’s own cost.
Grey had been subject to a remediation order (RO) obtained by the FTT in May 2024, which required Grey to fix all building safety defects by 9 September 2025. Grey applied for an RCO against the Developer and over 90 associated companies (Respondents), requiring them to make contributions towards the costs incurred and to be incurred in investigating and remediating defects. The Respondents argued that it would not be “just and equitable” to make an RCO because, amongst other things, the remediation scheme (and associated cost) was disproportionate and many of the defects that were identified were not “defects” under section 120(2) of the BSA.
The Decision
The FTT found that it was just and equitable to make an RCO of over £13,000,000 against 76 of the Respondents on a joint and several basis, with the onus being on the associated companies to determine how much each should contribute. In coming to this decision, the FTT addressed several key issues:
1. Is it just equitable to order an RCO against the Respondents?
The FTT made clear that the Developer was the “key target” and positioned at “the top of a hierarchy of liability”. Factors such as the extent of the Developer’s knowledge of combustible materials in the external walls before Vista Tower was sold to Grey were also considered relevant. In relation to the associated companies, the FTT found the following to be relevant:
- Whether the associated company was involved in the building/property sector.
- Whether the associated company was presented to potential investors as being part of the relevant group (for example, companies which share the same name).
- Whether the associated company shared the same owners as those of the Developer.
- Whether financial or other dealings linked to the associated company.
The FTT also considered factors relating to the Applicant in deciding whether it was “just and equitable” to make an RCO, including Grey being an experienced and well-funded property investor. The FTT did not, ultimately, lend much weight to these factors in light of the fact that:
- The Developer had provided a “surprisingly firm warranty and indemnity” to Grey as to compliance with Building Regulations.
- The Developer had failed to disclose serious fire safety warnings to Grey during the sale process and;
- A misleading fire risk assessment had been produced for Grey.
2. What is a “defect” under section 120(2) of the BSA?
The FTT rejected the argument that a “defect” should be limited to building work that did not comply with applicable Building Regulations: this is just one type of defect that an RCO could respond to. The FTT also clarified that a building safety risk could be above a “low risk,” rejecting the Respondents’ arguments that a medium/tolerable fire risk under the PAS 9980 standard would not be a building safety risk.
3. What remedial costs are just and equitable to include in an RCO?
The Respondents argued that the scope of works was disproportionate, and the fire and architectural experts agreed that aspects of the remedial scheme went beyond what was strictly necessary. However, the FTT found Grey was justified in progressing with a scope of works based on a PAS 9980 report, even though it may be argued that the PAS 9980 report was “too cautious”. The FTT also allowed costs for consequential or other works involved (for example, costs associated with replacing fire doors, regardless of whether these were dated from the original construction).
Comment
Whether an RCO is “just and equitable” will be decided on the facts of each case. However, this decision makes clear that the test for whether an RCO is “just and equitable” is wide-reaching, and the FTT will not hesitate to exercise its broad discretion in deciding whether to grant an RCO.
Though this decision re-iterates that developers remain the “key target” of RCOs, parties should be alive to the range of factors the FTT will consider when deciding whether a corporate body is an associated company, as section 121 of the BSA has the potential to reach “very remote” associated companies. Where the FTT is presented with “linking factors” between body corporates, it is for those companies to persuade the FTT that it would not be just and equitable to make an RCO against any such body corporates based on those “linking factors”.
