In February 2024, we reported on one of the first Remediation Contributions Orders (“RCOs”) made by the FTT under Section 124 of the Building Safety Act 2022 (“BSA”) in the case of Triathlon Homes LLP -v- (1) Stratford Village Development Partnership (2) Get Living PLC (3) East Village Management Limited [2024] UKFTT 26 (PC). The FTT’s decision was appealed and the appeal was decided by the Court of Appeal (“CA”) just last week.

Recap

Our report on the UT’s decision can be read here. But by way of recap, the case concerned East Village in Stratford, the former site providing accommodation to the athletes for the London 2012 Olympic Games and now a large permanent residential development. An application had been made by Triathlon Homes LLP, a leaseholder of a number of units at the development owning the affordable and social housing units, for a RCO in respect of fire safety costs including both costs already incurred (and paid) in service charges as well as costs yet to be incurred.

The FTT decided that a RCO could be made in respect of costs incurred prior to the relevant provisions of the BSA coming into effect and that it was just and reasonable to make a RCO against the original developer, Stratford Village Development Partnership (“SVDP”), as well its parent company, Get Living PLC (“Get Living”). This was the case even though Get Living had acquired SVDP many years after the original construction. The RCO was made irrespective of the fact that some of the costs for the remediation works were being met by the Building Safety Fund (“BSF”). The FTT said there was no good reason why SVDP/Get Living should not fund the remediation costs, and that recourse to public funds is to be seen as a means of last resort.

The effect of the RCO was that over £16m was ordered to be paid to East Village Management Limited (“EVM”), the management company with the repair and maintenance responsibilities under the leases, as Triathlon’s total share of the costs for remediation works, plus a further £700k for other remediation measures, and over £1m was to be reimbursed to Triathlon.

SVDP and Get Living appealed the FTT’s decision to the CA through a ‘leap-frog’ procedure, by-passing the Upper Tribunal as the usual route of appeal for a FTT decision.

The issues for the CA to decide were :-

1. Was the FTT wrong in deciding it was just and equitable to make the RCO; and

2. Was the FTT wrong in finding that a RCO could be made in respect of costs incurred before Section 124 of the BSA came into force.

The CA’s decision

In a detailed judgment, the CA dismissed the appeal in an unanimous decision. The full judgment can be read here [2025] EWCA Civ 846.

The first ground

On the first ground of appeal, the CA dismissed all 10 ‘sub-grounds’ of reasons advanced by SVDP and Get Living that the FTT was wrong to find it just and equitable to make the RCO. Significantly, the CA found the FTT was right in finding that the BSF was a means of last resort. Whilst public funding for certain works and buildings was available by way of the BSF, there was nothing to say that this was intended to displace the provisions of the BSA. The FTT was therefore justified in finding it difficult to see why the public purse should bear the costs over SVDP and Get Living.

The second ground

On the second ground of appeal, the CA upheld the FTT’s decision that a RCO could be made in respect of costs incurred prior to Section 124 of the BSA coming into force on 28 June 2022 (a matter considered by the Supreme Court just 2 months before in the case URS Corporation Ltd -v- BDW Trading Ltd [2025] UKSC 21) which said, amongst other things, that Section 124 has retrospective effect).

On this point, the CA said :-

“It is necessary to interpret section 124 in such a way as to give effect to the purposes of Part 5 of the Act. These purposes include the protection of leaseholders from financial risk (URS at [84]), or to ensure that risks from historical defects are remedied without the leaseholders having to bear the potentially very large costs (URS at [274] per Lord Leggatt). One of the statutory mechanisms to give effect to this purpose is the protection for leaseholders in schedule 8, but, as we have decided in Adriatic, this only provides protection from being required to pay; it does not enable payments that have been made to be recovered.

It seems to me that the FTT is right that it is very difficult to believe that Parliament intended that those leaseholders who had not paid should receive this protection but those leaseholders – perhaps as the FTT says in the same block – who had paid should be left without any remedy at all, except the prospect of suing developers and contractors in what would no doubt be long, complex and expensive proceedings in the Technology and Construction Court.

It is far more consonant with the purposes of the Act to interpret section 124 as providing the statutory mechanism for leaseholders who have paid to seek to pass on the costs they have already incurred – whether before or after the Act came into force. In URS at [115]-[116] the majority accepted a submission for the Secretary of State that there was no good policy reason why Parliament would have decided to "penalise" those developers who had been pro-active in investigating, identifying and remedying defects, and had thereby acted responsibly.

Similarly there is no good policy reason why Parliament would have decided to "penalise" leaseholders whose landlords (perhaps at the leaseholders' own instigation) had acted responsibly and got on with repairs; a fortiori there is no good reason why Parliament should have prejudiced leaseholders who had themselves (possibly at great sacrifice) discharged their service charge debts as opposed to those who had not.”

Conclusion

The CA’s decision is another example of the Courts and Tribunals seeking to give effect to Parliament’s intention in passing the BSA, of protecting leaseholders affected by the costs of fire safety works and other associated costs.

For more information or advice concerning these provisions, or the provisions of the BSA generally, please do not hesitate to contact a member of the team on 01435 897297 or info@kdllaw.com.

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