76 Shades of Grey GR Ltd: Remediation Contribution Orders - Grey GR Limited Partnership v Edgewater (Stevenage) Limited and others (2025) FTT

Overview

Grey GR Limited Partnership (“Grey GR”), the landlord and Applicant, sought remediation contribution orders pursuant to s.124 of the Building Safety Act 2022 (“BSA 2022”) against Edgewater (Stevenage) Limited (“Edgewater”), a developer and SPV, and a further 75 companies (“the Respondents”) in respect of a building in Stevenage known as Vista House.   Following a hearing in November 2024, the First-tier Tribunal (“FTT”) granted the orders by a decision handed down on 24 January 2025 . In total, the Respondents were required to make payments totalling £13,262,119.08 on a joint and several basis.

This is the first time that the FTT has considered the question of remediation contribution orders since the Upper Tribunal (sitting as the FTT) decided Triathlon Homes LLP v Stratford Village Development Partnership & Ors [2024] UKFTT 26 (PC). The Vista Tower decision provides further clarity about the test of ‘relevant defect’ under s. 120 BSA 2022, as well as giving several examples of how the ‘just and equitable’ test under s. 124(1) BSA 2022 would be applied in respect of numerous respondents with greatly differing characteristics.

The Vista Tower building had previously been the subject of an earlier application for a remediation order against Grey GR under s.123 BSA 2022 by the Secretary of State for Levelling Up, Housing and Communities, which resulted in a remediation order being made in April 2024. The FTT’s latest decision, therefore, represents how landlords who have themselves been required to remediate a defective building by way of a remediation order may seek to recover their outlay by applying for a remediation contribution order against the original developer or other parties.

Factual background

Vista Tower is a 16-storey block over 45 metres high which accommodates 73 residential properties. It was originally built in the 1950s/ 1960s as an office block and was converted into flats in 2015/2016. Extensive works were carried out to the external walls as part of the renovation.

The first respondent in the case was Edgewater, the original developer of Vista Tower, which had commissioned the conversion of the building from office space to residential apartments. Edgewater granted long residential leases for each of the flats, with a total premium paid for those leases of £15,633,725.  The remaining respondents included multiple investors and associated companies. 

In June 2018, Grey GR purchased the freehold from Edgewater, as part of a portfolio of ground rent investments for the Railpen Group, a pension fund. 

After the Grenfell Tower tragedy raised concerns about fire safety in high-rise residential buildings, a Consolidated Advice Note (“CAN”) was issued in January 2020, mandating the removal of all combustible materials from such buildings. In March 2019, after assessing Vista Tower in Stevenage, local authorities identified hazardous combustible materials in the building but opted not to enforce action due to existing fire precautions. The CAN was later withdrawn on 10 January 2022, before updated fire risk guidance was issued by way of PAS 9980:2022, published on 31 January 2022.

Grey GR sought funding from the Building Safety Fund to remediate necessary works, which was granted in part in December 2020. The issues identified in 2019 and 2020 included combustible glazing, panels and a lack of cavity barriers / fire stopping. Interim measures imposed to maintain building safety, including a waking watch, were put in place at the building.

By mid-2023, significant progress was made in addressing internal compartmentation and fire-safety deficiencies, with new contractors engaged to complete the remaining remedial works. As of September 2023, at the final case management hearing in the remediation order proceedings, a specification of remedial works and a programme for carrying out those works was agreed.

On 17 January 2024, Grey GR entered into a grant funding agreement (“GFA”) with Homes England to address the fire safety defects in the building. The GFA requires Grey GR to seek legal remedies for any issues related to the building’s design and construction, including claims against contractors and manufacturers. External remedial works commenced in January 2024 and are scheduled for completion by September 2025.

On 10 May 2024, as referred to above, the FTT made a s.123 remediation order against Grey GR, at the instigation of the Secretary of State.

Grey GR, in turn, sought remediation contribution orders against the Respondents due to the significant design and construction defects, estimating costs of approximately £14.7 million for the remediation of the building.

The Respondents resisted the orders on the grounds that the defects identified were not “relevant defects” for the purposes of s.120 of the BSA, and that it would not be “just and equitable”, per Triathlon, to do so.  They also argued that the remedial works that had been undertaken by Grey GR went beyond the scope of an RCO, which they argued should be reasonably and properly incurred, if it were just and equitable to do so.

Relevant defects

In the remediation order case of April 2024, the FTT had proceeded on the basis of an agreed specification of relevant defects. There was, however, some dispute in the remediation contribution order proceedings as to whether or not all of the works were in relation to relevant defects, and the correct quantum for those works.

• The FTT decided that a ‘defect’ for the purpose of s. 120(2) BSA (broadly construed as “anything done (or not done) or anything used (or not used) in connection with relevant works” and “causes a building safety risk”) was not limited to non-compliance with the Building Regulations. Non-compliance with the Building Regulations was “merely one not the only way in which something could be a ‘defect’” [68].
• A ‘building safety risk’ is defined at 120(5) of the BSA as “a risk to the safety of people in or about the building arising from (a) the spread of fire or (b) the collapse of the building or any part of it”.  The FTT considered that any risk above ‘low’ risk - understood as the ordinary unavoidable fire risks in residential buildings and/or in relation to PAS9980, as an assessment that fire spread would be within normal expectations - may be a building safety risk [72].

‘Proper’ and ‘reasonable’ scope of remedial contribution order

The FTT rejected the suggestion that the scope of an RCO should be restricted to that which is “unavoidable” [80].  Instead, it decided that any such determination would be fact sensitive, and would depend on what was just and equitable in a given case.   That exercise would be assisted by asking whether the remedial works were within “a reasonable range of responses/costs”, which on the facts before the FTT was deemed to be “relatively wide” [83].

‘Just and equitable’

Section 124(1) of the BSA provides that the FTT may make a remediation contribution order on the application of an interested person “if it considers it just and equitable to do so”.

The FTT was guided by the Triathlon approach as to what would be “just and equitable”.  It took the view that the remediation contribution order jurisdiction is “essentially not to be fault-based, providing a route to secure funding for remedial works, with the emphasis on protection of leaseholders/residents and helping to expedite remedial action.” [79] When deciding whether it was just and equitable to make or include certain costs in a remediation order, it was considered to be helpful to ask whether the relevant remedial works/costs were within a reasonable range of responses or costs [83]. In particular, while it was accepted that some of the remedial works were not proportionate [143], the advice to Grey GR was that they were necessary [144]. Following a detailed review of the different factors, the FTT considered that it acted reasonably to press on with these works [166].

As to whether a particular respondent should be specified in the order, the FTT elected to consider each of the respondents in turn and then to determine whether it would be “just and equitable” to impose an order. The FTT accepted that the just and equitable test is broad, allowing for flexibility in determining liability to ensure funding for necessary remediation work is accessible and prompt or “so that the money can be found” [349]. It also noted that the financial status of respondents should not significantly influence the decision to issue remediation contribution order [352].

Edgewater, as the developer, was a “key target, at the top of the hierarchy of liability”, in respect of whom there was “no doubt that a RCO should be made” [350]. Notably, this conclusion was also reached on the basis that Edgewater had known of combustible materials in the external wall, and had failed to address any defects itself.

The Respondents had suggested that the FTT take account of the fact Grey GR was a substantial and sophisticated property investor which had been on notice of the fire defects, and which had chosen to purchase Vista Towers a year after the Grenfell Tower tragedy. The FTT acknowledged that Grey GR did qualify as an entity against which a remedial contribution order could be granted, but considered that Edgewater and its associates would be “higher in the hierarchy of liability” than Grey GR.

The FTT then considered each of the remaining respondents (numbering 90 at the time of the hearing) in turn, in accordance with the approach set out in Triathlon.  This was the first time that the FTT had addressed the wide definition of associated persons under s.121.  A number of general points were made in respect of power to make remediation contribution orders against associated bodies corporate and partnerships:

• The ability to issue remediation contribution orders against associated corporate bodies marks a significant shift in legal practice. While it does not pierce the corporate veil or impose unlimited personal liability, it allows for some erosion of corporate identity for specific remediation purposes [351].
• There was no automatic presumption that an associate would be made liable, particularly where these were associated by common directorship [357]. Rather, “additional linking factors” would be required, which may require explanation, and would be fact sensitive.
• The involvement of family members in the corporate structures and their roles in management was noted by the FTT, with the Tribunal considering these relationships and how they relate to the overall structure and accountability of the organizations involved [363]. For example, in its examination of the formal structure of ownership between Rivkah and Jacob Dreyfuss, who were spouses and each directors of multiple of the Respondents, the FTT noting the blurring between different entities and individuals [365].
• The possibility of substantial control and influence.  On these facts, the financial relationships between Leslie Frankel (father and spouse of various other directors of the Respondents), and Edgewater as well as the other Respondents taken by the FTT to signify a critical link, even though Mr. Frankel was not himself a direct respondent. [368]

In a detailed schedule to the decision, the FTT concluded that all but 15 of the respondents should also be subject to a remediation contribution order.  In relation to those companies where an order was made, the linking factors to Edgewater were determined to have “outweighed” those factors against making an order [373].

The FTT noted that many of the companies had poor records and operated in a disorganised manner, suggesting a lack of proper governance typical of prudent property developers [371]. This raised concerns about company accountability in relation to financial dealings and obligations, particularly in respect of covering the costs related to fire safety remediation.

One point of particular significance is that the FTT considered that the burden of the cost should not fall on apparently external investors [372]. For example, the significant majority of the shareholding of Edgewater (Brighton) Limited (the second Respondent) was genuinely independent; it would therefore not be just and equitable to make a remediation contribution order against that entity [381]. It also took the view that those with closer ties to the development should ensure sufficient funds be made available for remediation. Finally, the FTT considered that it was just and equitable in this case to make the respondents jointly and severally liable [379].

Conclusion

Although not binding, the judgment of the FTT provides useful clarity in respect of the approach of the tribunal to remediation contribution orders: 

• It confirms the FTT’s consideration of definitions of “defect” and “building safety risk” under s.120, as well as the “just and equitable” approach as set out by the same tribunal in Triathlon.
• The case involved a corporate web of companies, which encompassed familial and other close relationships, and offers helpful guidance in respect of “associated persons” for the purposes of s.121.
• It also demonstrates how a party may use the BSA for recovery of these costs: a remediation order was made against Grey GR, whereupon it sought remediation contribution orders against the Respondents.  As noted by the FTT, Grey GR had also issued proceedings in the Technology and Construction Court against Edgewater and two of the other respondents for a building liability order under s.130 of the BSA, which paved the way for contributions from other parties down the supply chain.