“Words Mean What I Say They Mean”: The Building Safety Act, Just and Equitable and Corporate Law

Ask any lawyer (civil or common) and especially any corporate lawyer and they will tell you that a corporation has its own legal persona which, absent some breach in its incorporation,¹ remains sacrosanct. Company A is not to be treated as Company B nor is A to be liable per se for anything B does. This concept was known in theory in Roman law, can be seen in the existence of guilds in medieval England and was occasionally recognised in relation to debt as early as 1680.²

The traditional means of bypassing that separate legal persona were either piercing the corporate veil or attribution of B’s defaults to A.³ The latter is, for present purposes, uncontroversial. On the former, in Prest,⁴ Lord Sumption said:

35.  I conclude that there is a limited principle of English law which applies when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. The court may then pierce the corporate veil for the purpose, and only for the purpose, of depriving the company or its controller of the advantage that they would otherwise have obtained by the company's separate legal personality. The principle is properly described as a limited one, because in almost every case where the test is satisfied, the facts will in practice disclose a legal relationship between the company and its controller which will make it unnecessary to pierce the corporate veil. Like Munby J in Ben Hashem , I consider that if it is not necessary to pierce the corporate veil, it is not appropriate to do so, because on that footing there is no public policy imperative which justifies that course. I therefore disagree with the Court of Appeal in VTB Capital who suggested otherwise at para 79. For all of these reasons, the principle has been recognised far more often than it has been applied. But the recognition of a small residual category of cases where the abuse of the corporate veil to evade or frustrate the law can be addressed only by disregarding the legal personality of the company is, I believe, consistent with authority and with long-standing principles of legal policy.

Just and equitable

The legal test of “just and equitable” arises regularly across the breadth of our legislation. Although the context of the particular instrument plays a role in the proper construction of the phrase, broadly the test of “just and equitable” offers the court a discretionary power by which it can weigh the competing needs, faults and interests of the parties in order to achieve a fair result. Indeed, in relatively recent legislation, the term “fair” has sometimes been used to replace “just and equitable” on the express basis that the latter is considered by some to be “somewhat antiquated”.⁵  Nonetheless, “just and equitable” remains a mainstay of English and Welsh legislation.⁶

A commonplace example of the phrase is found in section 122(1)(g) of the Insolvency Act 1986, by which a company may be wound up if the court considers it to be “just and equitable”. The application of the phrase was explained by the Privy Council in Lau, and includes circumstances that the court weighs in determining whether the applicant has established a just and equitable winding up.⁷ In other words, a just and equitable assessment is not just a nod-through.

The BSA

The bill that led to the Building Safety Act 2022 (“BSA”) was proposed in order to learn lessons from the Grenfell Tower Fire⁸ and to remedy systemic issues identified in the Hackitt independent review.⁹ The BSA’s expressed intention is to make provision about the safety of people in or about buildings and the standard of buildings.

The BSA is divided into a number of parts that variously introduce a new building safety regulator (Part 2), introduce amendments to the Building Act 1984 (Part 3), and introduce considerations in respect of “higher risk buildings” (Part 4).¹⁰

Most interesting for present purposes is the novel liability introduced by section 130, in Part 5 of the Act. Section 130 gives the court power to make a Building Liability Order (“BLO”).  The BLO takes a pre-existing liability (from the Defective Premises Act 1972, section 38 of the Building Act or any other risk to the safety of people in and about the building arising from the spread of fire or structural failure) and applies it to other associated entities who would not, prior to the coming into force of section 130, have been caught by those liabilities. It is therefore, manifestly, an anti-avoidance provision to ensure that companies associated with the wrong-doer also foot the bill.

The important caveat is that the BLO is made at the discretion of the court, and may be made if the court considers it “just and equitable” to do so: section 130(1) BSA. 

The paradox arises: how can it be said to be just and equitable to impose liability on a body which is otherwise blameless? 

Recent caselaw

There is very limited commentary on the meaning and application of “just and equitable” for the purposes of section 130 BSA. 

In Willmott Dixon Construction Limited v Prater,¹¹ defendants to an additional claim under section 130 applied for a stay of that claim. Mrs Justice Jefford commented that, although the main claim and additional claim did not strictly have to be dealt with together, it was sensible if they were. Amongst other reasons, this was stated to be because although the associated company could not challenge a finding, or even an agreement, establishing liability of the original entity in separate proceedings, the Defendant could still argue that the circumstances in which that liability was established mean that it is not “just and equitable” to make a BLO.¹² Mrs Justice Jefford held that such arguments are avoided if the associated company is party to the main proceedings. The court did not, however, consider further the circumstances that could contribute to the consideration whether “just and equitable”.

The explanatory notes to the 2022 Act propose that one consideration in the question whether it is just and equitable to order a BLO is whether the associated company can receive a fair trial. This argument was considered in the unopposed application for a section 130 BLO in the case of 381 Southwark Park Road RTM Company Limited.¹³ Since the defendant had participated in the trial, it was considered that a BLO should be made.¹⁴ It was material to the court’s decision to order a section 130 BLO that the company to whom the relevant liability applied was a special purpose vehicle, whose sole existence was to acquire the freehold of the relevant property in order to develop it and then divest of it. As such the company was inevitably thinly capitalised and dependent on inter-company or inter-group loans for its financial wellbeing.¹⁵

The remaining source of judicial discussion of the meaning of “just and equitable” in section 130 derives by analogy with the judicial treatment of the phrase in other parts of the BSA.  In particular, “just and equitable” is part of the test for an order under section 124 (the Remediation Contribution Order, RCO).  RCOs are the province, in the first instance, of the First Tier Tribunal (Property Chamber) (“FTT”). 

In Triathlon,¹⁶ the FTT considered it just and equitable to make RCOs against the developer, on the basis that the “policy of the 2022 Act 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” and that “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.”¹⁷

On appeal, the argument presented by the appellant in Triathlon, that the FTT wrongly applied a presumption that it was “just and equitable” in circumstances where the developer could fund the work, was rejected.¹⁸ The Court of Appeal commented that “there may indeed be cases where it would not be just and equitable to make an RCO against those within section 124(3), even if the result was to leave the costs to be funded by the public” but it did not offer guidance on when that might occur.¹⁹ Thus, although the “just and equitable” test still remains on paper, it is unclear on what basis a party would be successful in arguing that is not just and equitable to make a section 124 order, particularly  if they are able to fund the work.²⁰

If that approach were taken in applications for BLOs under section 130,²¹ the scope for an associate company to argue against a finding of “just and equitable” would (contrary to the paradox identified above) be narrowed against the associate company.

Separately, the FTT may also be asked to consider making an order under section 123 (the Remediation Order, or “RO”). Unlike sections 124 and 130, there is no just and equitable test in section 123. Decisions on section 123, such as Secretary of State for Levelling up, Housing and Communities (commonly referred to as “Vista Tower” after the property),²² indicate a not-dissimilar approach to that in Triathlon where the net for potential, corporate payors is cast wide.²³

The problems

The BSA therefore poses two conundrums:

1. How do its provisions sit with company law as traditionally understood?
2. What are the parameters to the operation of section 130?

As to the first, there is a simple answer and a less simple answer. The simple answer is the BSA does not sit with company law as understood. Section 130 was intended and was expressed to remove the corporate veil and to ignore separate corporate personality. The less simple answer involves the evasion of corporate responsibility. It is often said that section 130 exists to prevent companies using shell companies deliberately to avoid responsibility. If that be the case, why does not the passage from Prest apply? That would mean there was already a common law right to recover and the vice at which section 130 was aimed was covered. If that is right, then either section 130 is otiose or there must be strict parameters on its operation.

The question of parameters is therefore critical – and the only ones are that it must be “just and equitable” to make the order. Thus, one returns to what is meant by just and equitable. After all in both Triathlon and Adriatic,²⁴ the Court of Appeal made clear that the parameter on the operation of the BSA was what was just and equitable. At the same time, however, the Court in effect held that the parameter imposed by what is “just and equitable” (i.e. where it would not be just and equitable to make the order) was exceptionally narrow.²⁵

Possible answers

Manifestly the easiest answer is to adopt that which was suggested at [65] in Triathlon:

Suppose a case where a director of a landlord was also a director of other companies which have no other connection with the landlord or its group; such companies might have had nothing to do with the development and be engaged in entirely different businesses, or might include a charitable company to which the director had given his time voluntarily. It is not obvious that it would always be just and equitable to make RCOs against such associated companies even if the effect of refusing to do so was to leave the costs to be borne by the public.

That, we suspect, however, will not be open to many. The use of cladding was widespread and there were many in the manufacture, supply, delivery and installation supply chain – quite apart from the landlord, the developer and the main contractor. Thus, the BSA will probably capture a considerable number of companies – in theory.

First, to a non-England & Wales entity it is possible that it could object to jurisdiction. Absent the facts, it is difficult to be definitive on this issue – but it is reasonable to assume that an entity that manufactured and/or supplied and/or installed and/or advised on defective cladding will not be able successfully to resist jurisdiction.

Second, to argue that either the product was not defective or it was only defective due to installation or on site design (for which the entity was not responsible). Thus, the argument would be that as the entity did not cause the defect it would not be just and equitable to impose liability.

Third, to try to expand [65] of Triathlon to contend that the supposed parameter of “just and equitable” is too narrowly drawn on the facts of the particular case. If Vista Tower survives appeal this may be difficult.

Fourth, an attack on the very limited application of “just and equitable” as a matter of law. This would contend that there are two conflicting principles at work here: the expressed intention behind the BSA and very long standing company law. The former has been entirely focussed upon and the latter ignored in the judgments handed down. Allied to this is the fact that on the current case law it is very difficult to see what – if any – parameter “just and equitable” sets. All of that said, this argument would not succeed below the Court of Appeal.

Fifth, again for a non-England & Wales entity, to resist enforcement in their own country. We can see two grounds for this: retrospectivity and arguments based on Article 1 Protocol 1 of the European Convention on Human Rights. Both are live arguments in England and Wales and may find traction elsewhere.

1. See eg Salomon v Saloman [1897] AC 22
2. City of London (1680) I Ventr. 351. Though formal recognition had to await the Joint Stock Companies Registration and Regulation Act 1844
3. A distinction made clear by Lord Sumption in Petrodel Resources Ltd v Prest [2013] UKSC 34; [2013] 2 A.C. 415; [2013] B.C.C. 571 at [16].
4. Op cit
5. Explanatory Notes to the Banking Act 2009, at paragraph 247
6. These include examples as wide and varied as s. 859M Companies Act 2006 (rectification of the register); s. 22E Water Industry Act 1991 (interest on penalties); and s. 10 of the Severn Bridge Tolls Act 1965 (extinguishment of ferry franchises)
7. Lau v Chu [2020] UKPC 24; [2020] 1 W.L.R. 4656. For a recent example of this process, see Khan v Miah [2025] EWHC 635 (Ch) ; [2025] B.C.C. 675.
8. The fire at Grenfell Tower in west London broke out on 14 June 2017. It claimed the lives of 71 people.
9. Independent Review of Building Regulations and Fire Safety: final report - GOV.UK
10. Defined as a building in England that is at least 18 m in height/at least 7 storeys, and contains at least 2 residential units: s. 65 BSA.
11. [2024] EWHC 1190 (TCC)
12. Op cit at [18]
13. 381 Southwark Park Road RTM Company Limited v Click St Andrews Limited (In Liquidation) [2024] EWHC 3569 (TCC); (2024) 219 Con. L.R. 29
14. Op cit at [19] and [20]
15. Op cit at [12]
16. Triathlon Homes LLP v Stratford Village Development Partnership [2024] UKFTT 26 (PC); (2024) 212 Con. L. R. 1.
17. Op cit at [265] and [278]
18. Triathlon Homes LLP v Stratford Village Development Partnership [2025] EWCA Civ 846 at [61]-[64]
19. Op Cit at [65]
20. See also Grey GR Limited Partnership v Edgewater (Stevenage) Limited a decision of the FTT on 24 January 2025 in respect of property “Vista Tower”, in which extensive section 124 RCOs were made.
21. And, indeed, a comparison between the two sections was made in 381 Southwark Park Road
22. The Secretary of State for Levelling Up Housing and Communities v Grey GR Limited Partnership 216 Con. L.R. 1
23. In the case of Vista Tower – very wide
24. Adriatic Land 5 Limited v Long Leaseholders at Hippersley Point [2025] EWCA Civ 856
25. See Triathlon at [65]