Introduction
The definition of “Vista” includes an outlook or view of a lengthy series of events. It is perhaps appropriate then that it is relation to “Vista Tower” in Stevenage that the views of various tribunals and courts in relation to many of the new provisions of the BSA are to be considered, and the prospects for future claims or defences tested.
Vista Tower was originally an office block, built in the 1960s and known more prosaically as Southgate House. It is 49.5 metres high, comprising 16 storeys.
In the mid-2010s, a company known as Edgewater (Stevenage) Limited (“Edgewater”) was incorporated by a Mr Dreyfuss, and Edgewater purchased the freehold of Vista Tower in July 2014. The property was marketed for investors as a conversion to residential accommodation comprising 73 flats, and leases for terms of about 250 years were entered into with various tenants. In 2018, the freehold was then sold by Edgewater to Grey GR Limited Partnership (“Grey”), who acted on behalf of the Railpen Group, operating a pension fund on behalf of railway workers.
A series of investigations were carried out into fire safety at Vista Tower from 2019 on. The issues identified included: (i) on “Wall Type 1” (render applied to concrete façade), the use of PIR insulation (ii) on “Wall Type 2” (UPVC glazed elevations with spandrel panels consisting of EPS insulation), the use of combustible insulation; and (iii) on all elevations, issues with vertical cavity barriers and cavity barriers around openings. Issues also were identified with the internal compartmentation of the property.
Grey obtained £327,000 in funding from the Building Safety Fund in June 2020 for pre-tender support. It appears that ultimately funding of over £12.4 million was obtained under a Grant Funding Agreement (the “GFA”) between Grey and Homes England, with an obligation for Grey to pursue the legal remedies available to it.
The RO Application - Secretary of State for Levelling Up, Housing and Communities v Grey GR Ltd Partnership, CAM/26UH/HYI/2022/0004, 216 Con. L.R. 1
The application for an RO was brought by the Government in November 2022 against Grey under s123 of the BSA. The FTT reached its decision in April 2024.
The decision was in keeping with the approach of the FTT to ROs before, and since. Although the FTT has approached ROs on the basis that it has a wide discretion as to whether or not to award an RO, it has done so in every case that has been before it to date. The mission focussed approach of the FTT is shown in paragraph 130 of the judgment, which notes that the “whole focus of the BSA is on leaseholder protection” and that 57 leaseholders have asked the FTT to make the RO. Perhaps most strikingly, the RO was ordered despite the fact that Grey had entered into a remedial works contract and the works had already commenced. Notwithstanding this, the FTT determined that the RO would function as a “backstop” in the event that there were any issues, and on which the applicants/leaseholders (who may not all be parties to the building contract) could rely in due course.
Many commentators have noted that this approach means that it would be a very rare indeed where a relevant defect is established, and an RO is not granted in respect of that defect. As the FTT itself put it at [121]: “if the pre-qualification criteria set out in s123 apply and there are relevant defects we consider that it is likely that the tribunal will make an order, subject to the facts of each case.”
The subsequent decisions of the FTT in relation to ROs have borne this out.
The RCO Application - Grey GR Limited Partnership v Edgewater (Stevenage) Limited and others, CAM/26UH/ HYI/2023/0003, 218 Con. L.R. 66
Following on from the RO, and in light of its obligations under the GFA, Grey sought to claim RCOs against 96 separate respondents including Edgewater and parties said to be “associated” within the meaning of s124(3)(d) of the BSA. The reason for casting the net this wide was that Edgewater was an SPV with limited assets, but was part of a “group” of companies with common directors or shareholders referred to in marketing materials at the time of sale.
RCOs were awarded against 76 of the respondents, on a joint and several basis. The reasoning is set out in a detailed schedule to the judgment, but in the main, the only respondents against whom an order was not made were those which had no links in terms of not featuring as part of the “group” in the marketing provided when the Claimant bought Vista Tower, or had investors who were not involved in any way, or were not engaged in the business of property development or ownership. The practicalities of enforcing against any or all of the 76 respondents on a joint and several basis, and the relative culpability of any one respondent, are not explored in the judgment.
The Tribunal found that the “the just and equitable test in section 124 of the Act is deliberately wide ‘so that the money can be found’”. Some may have thought that the “just and equitable” test would be used negatively as a brake on the number of respondents falling within the broad definition of association, against whom an order can be made. But the Tribunal did not primarily use the “just and equitable” test to bring in an assessment of culpability. Indeed the approach of ensuring “the pot is filled” indicates that the test can be used positively as a basis on which to make an order in a borderline case.
The Tribunal’s decision is also noteworthy in relation to the approach to a “relevant defect,” confirming (consistent with case-law relating to ROs) that non-compliance with Building Regulations at the time of construction was not the correct approach. The test was much wider, and involved consideration of whether the construction was non-compliant with current standards, if it followed from those standards that a “building safety risk” as specified in s120 of the BSA existed.
In addition, in relation to whether there was a “building safety risk”, although the respondents argued that a risk that had been found to be “tolerable” pursuant to a fire safety expert report under the PAS 9980 standard (which the fire safety experts had agreed), the relevant risk for the purposes of s120(5) of the BSA was anything above a “low” risk.
It is understood that these points will be addressed on appeal to the UT. One of the issues which will be interesting to consider is the apparent disconnect between the promotion of PAS 9980 by the Government as an appropriate basis on which to assess “risk” and adopt remedial works (including by adoption of the same into the Self-Remediation Terms with various developers), and the approach of the FTT. Moreover, the approach of the FTT may also give rise to a potential problem for respondent developers where, in proceedings in the High Court where they seek to reclaim sums paid out under an RCO against the builders, designers or other parties involved in the construction of the property, the High Court may well apply a different approach to the question of whether a “defect” has arisen under the relevant contracts and appointments, or the appropriate remedial scheme.
Building Liability Orders
Finally, the RCO judgment also indicates that Grey has issued separate proceedings in the High Court for a Building Liability Order (“BLO”) under s130 of the BSA, although it appears that those proceedings do not include claims against the builder or architect (or their associates). The judgment indicates that the BLO proceedings have been held up due to service issues in Switzerland. If those issues are overcome, then Vista Tower may also give one of the first indicators of the outlook for applications for a BLO.
Paul Bury has been involved in numerous high-profile building safety disputes to date, including LDC v Downing Construction Ltd [2022] EWHC 3356 (TCC), Bridport House ([2024] EWHC 3449 (TCC)), the Tesco Woolwich litigation, and has several cases currently progressing in the FTT, and further litigation, arbitration and adjudication cases relating to downstream claims.
