Key takeaways from the Triathlon Homes LLP v Stratford Village Development Partnership decision
July 2025Citation: [2025] EWCA Civ 846
The Court of Appeal recently handed down its long-awaited decision in Triathlon Homes LLP v Stratford Village Development Partnership and others, a significant case concerning the scope and application of Remediation Contribution Orders (“RCOs”) under section 124 of the Building Safety Act 2022 (“BSA”). This judgment marks the first time the Court of Appeal has considered the discretionary power to make RCOs and provides important clarification on the policy objectives of the BSA, the role of developers and associated entities, and the position of public funding in the remediation landscape. In this article we consider the practical implications and key takeaways of the decision.
Key takeaways
The Court of Appeal’s decision provides clarity on several important aspects of the BSA, particularly in relation to the scope and purpose of RCOs under section 124. Five key takeaways from the decision include:
- Endorsement of developer responsibility (and their associates) under the BSA
The decision affirms the policy of the BSA that original developers and their associated entities should bear the primary financial responsibility for the remediation of building defects. The decision also endorsed the First Tier Tribunal’s (“FTT”) view that purchasers of corporate entities accept the risk of inheriting liabilities, including those arising under the BSA.
- Broad powers of RCOs and section 124 of the BSA
The decision confirms that section 124 operates with retrospective effect, meaning that RCOs can apply to costs incurred before the relevant provisions of the BSA came into force on 28 June 2022. Importantly, the Court of Appeal also confirmed that RCOs are not limited solely to the costs of carrying out permanent remediation works, instead, they can also encompass interim safety measures.
- Public funding as a last resort
The Court held that the existence of grant funding does not preclude the making of RCOs. Where it is just and equitable to do so, those with relevant associations to the building (particularly developers or their parent companies) can still be required to contribute, regardless of whether the works are being publicly funded.
- The BSA’s statutory remedies
The decision affirms that the remedies available under the BSA operate independently of any pre-existing contractual arrangements. Applicants are not required to exhaust alternative legal claims before seeking relief under the BSA. While developers and their associated entities are still able to pursue claims against contractors, subcontractors, or consultants, these parallel proceedings will not delay or obstruct the imposition of an RCO.
- “Just and equitable” test
The decision reaffirmed that the “just and equitable” test under section 124 is not a rigid formula but a broad, discretionary standard that must be applied in light of all the relevant circumstances.
Finally, it should once again be noted that this decision was made in the context of a public policy (as expressed in the BSA) that developers, and not leaseholders, should bear the costs of any necessary works, and that RCOs are therefore not a fault-based order. It does not follow that developers can then immediately and automatically seek to pass on any costs to consultants and contractors – they must prove that such parties have breached their obligations and caused any loss said to be suffered. These points are fact-specific and turn on each individual case, to be determined at trial.
Continue reading for a comprehensive overview of the case and our analysis of each ground of appeal…
Background
The dispute involved fire safety defects in five residential blocks at a single plot forming part of a wider site known as East Village, Stratford (“the Blocks”). Triathlon Homes LLP (“Triathlon”) is the long leaseholder of all social and affordable housing within the Blocks. Get Living plc (“Get Living”) is a property company that, through subsidiaries, owns the long leases to all the private rented housing in the Blocks. The Blocks were developed by Stratford Village Development (“SVDP”), which is a limited partnership whose three partners are ultimately owned (through subsidiaries) by Get Living. However, Get Living did not own SVDP at the time of development. East Village Management Ltd (“EVML”) is a management company responsible for the repair and maintenance of the structure and common parts of the Blocks and is owned jointly by Get Living and Triathlon.
In November 2020, fire safety defects were identified in the design and construction of the non‑ACM cladding used on the façades of the Blocks. As a result, interim fire safety measures, including a waking watch, were implemented. Remediation works (“Major Works”) began in April 2023 and are scheduled for completion by August 2025. These works involve the removal and replacement of the external cladding systems on all five Blocks. The total cost of the Major Works exceeds £24.5 million and has been funded by grants made available to EVML from the Building Safety Fund (“the Fund”).
In December 2022, Triathlon issued five applications to the First-tier Tribunal (“FTT”) pursuant to section 124 of the BSA, seeking RCOs against SVDP and Get Living. The applications sought to recover Triathlon’s proportionate share of the costs of the Major Works being undertaken by EVML, as well as sums already incurred in respect of interim fire safety measures. The FTT granted the RCOs against both respondents, with the total amount awarded exceeding £17 million (we covered this decision here). These RCOs were among the first to be made under the BSA.
The matter then proceeded to the Court of Appeal, with permission to appeal being granted on two grounds:
- Ground 1: whether the FTT erred in concluding that it was “just and equitable” to make RCOs against SVDP and Get Living in respect of the Major Works, notwithstanding that those works were being funded through the Fund; and
- Ground 2: whether the FTT was wrong to conclude that an RCO could be made in respect of costs incurred prior to the relevant provisions of the BSA coming into force on 28 June 2022.
The Court of Appeal decision
The Court of Appeal dismissed the appeal on both grounds and upheld the decision of the FTT in full. The judgment provides clarification on the application of section 124 of the BSA. The Court’s reasoning in relation to each ground of appeal is considered in further detail below.
Ground 1: whether the FTT erred (in 10 separate respects) in concluding that it was “just and equitable” to make RCOs against SVDP and Get Living for the costs of the Major Works (for which EVML has funding from the Fund)
Ground 1.1 – an unexpressed presumption
The Appellants contended that the FTT had incorrectly adopted an implied presumption that it is “just and equitable” to make an RCO against a developer (or any party falling within section 124(3) of the BSA) where that party has the means to fund the remediation works.
The Court of Appeal rejected this ground of appeal, endorsing the FTT’s core conclusions. First, it affirmed that a central policy of the BSA is to place primary financial responsibility for the remediation of defects on developers. In doing so, the Court referred to and confirmed the Supreme Court’s reasoning in URS Corporation Ltd v BDW Trading Ltd, (which we covered here).
Secondly, the Court agreed that public funding, such as that available through the Fund, should be treated as a measure of last resort. However, the Court acknowledged that the FTT may have articulated this principle more broadly than necessary. It clarified that there may be circumstances in which it would not be just and equitable to impose an RCO on a party within section 124(3), even where the alternative would be for the costs to be met from public funds.
Ground 1.2 – passing on costs to developers
The Appellants submitted that the FTT had erred in relying on Regulation 3 of the Building Safety (Leaseholder Protections) (Information etc.) (England) Regulations 2022 SI 2022/589 to support its conclusion that the policy of the BSA is to place primary financial responsibility for remediation work on the original developer. They argued that Regulation 3 does not apply to entities such as Get Living or SVDP and therefore could not be used to justify the imposition of RCOs against them.
The Court of Appeal rejected this argument, holding that although Regulation 3 did not apply directly to SVDP or Get Living, the FTT was entitled to refer to it as indicative of the wider policy intent of the BSA. In particular, Regulation 3 reflects the principle that developers (or their associates), especially where they retain an interest in the building, should bear the financial burden of remediation.
The Court further found that the FTT was entitled to consider that EVML could, in principle, have pursued a claim for costs against the trustees of SVDP and, by extension, against SVDP itself. As such, the FTT was justified in concluding that it was “just and equitable” to make an RCO against SVDP. Likewise, the fact that Get Living could not have been pursued under Regulation 3 did not undermine the FTT’s reasoning. The FTT’s finding that SVDP was financially dependent on Get Living, its ultimate parent, was a proper basis for concluding that Get Living should also be the subject of an RCO.
Ground 1.3 – Triathlon’s motivation
The Appellants argued that the FTT erred in finding that the identity and motivation of an applicant seeking an RCO are irrelevant, except in cases involving malice. They contended that Triathlon’s motivations in applying for the RCOs should have been taken into account when determining whether it was just and equitable to grant the orders.
The Court of Appeal rejected this argument and held that the FTT was correct in concluding that it was unnecessary to inquire into Triathlon’s motivations. The Court reaffirmed the principle that a party exercising a legal right or pursuing a statutory remedy is not generally required to justify its motivations. It was not disputed that Triathlon was an interested party, and it was unsurprising that it would have a legitimate interest in how the remediation works were to be funded.
The Court noted that while EVML may have been the more obvious applicant for the RCOs, the practical difficulties it faced, stemming from the divergent interests of its shareholders and directors, meant it was understandable that Triathlon took the initiative. Importantly, the fact that the application was brought by Triathlon, rather than by EVML or the Secretary of State, did not alter the nature of the relief sought or affect the question of whether it was just and equitable to grant the orders. The same legal considerations would apply regardless of the applicant’s identity.
Grounds 1.4 and 1.10 – the public purse
These grounds concerned the Appellants’ challenge to the FTT’s conclusion that public funding, via the Fund, is intended to operate as a last resort, and its finding that if the Fund was left to finance the remediation works while other claims were litigated, an RCO applicant would be forced either to intervene in those claims or wait until their resolution.
The Appellants contended that the FTT had erred by adopting this characterisation of the Fund. They submitted that the correct question was whether it would be just and equitable to require Get Living to contribute approximately £20 million towards the remediation costs, and that it was wrong to characterise the Fund as a matter of last resort. In their view, RCOs should only be granted where the existing funding agreement was not working adequately.
The Court of Appeal rejected this argument. It found that, in substance, the Appellants were seeking to argue that no RCOs should be made because the works were already being funded and progressed in accordance with the BSA’s objectives. While the Court accepted that one key aim of the BSA is to ensure that necessary remediation works are carried out, it emphasised that another critical purpose of the BSA is to deal with the “who pays” question.
The Court noted that the BSA establishes a clear mechanism for allocating costs among those with a relevant connection to the building, and that a consistent and discernible principle under the legislation is that a developer, particularly one responsible for the defects and retaining an interest in the building, should bear primary financial responsibility. In that context, the Court agreed with the FTT’s characterisation of the Fund as a last resort and affirmed that it does not take a place in the hierarchy of those whom the BSA contemplates.
The Court held that the existence of public funding does not displace the operation of section 124 of the BSA. Where the statutory conditions for making an RCO are met, and it is just and equitable to do so, the availability of public funding does not amount to a valid reason for refusing to make an order. The FTT was correct to conclude that the policy of the BSA places primary responsibility on developers in the position of SVDP and Get Living.
Further, the Court addressed the Appellants’ criticism of the FTT’s observation that allowing the Fund to cover the costs while other litigation was ongoing would achieve the very thing that section 124 was intended to avoid. The Court clarified that the FTT’s point was not to preclude all litigation funding arrangements, but rather to affirm that section 124 anticipates the making of RCOs at an early stage, without the need for an applicant to await the outcome of parallel legal proceedings.
Ground 1.5 – pursuing other claims
Under this ground, the Appellants argued that the FTT had erred in finding no unfairness in Triathlon’s decision to seek a RCO rather than first pursuing other available or potential claims. They argued that, in circumstances where the remediation works were already being funded and progressed, the pursuit of an RCO was unnecessary. The Appellants also emphasised that the inability of either SVDP or Get Living to join third parties to the FTT proceedings raised concerns about the fairness and scope of accountability.
The Court of Appeal rejected this argument. It held that, given the remediation funding was being drawn from the public purse, the core issue was not merely whether the works were being undertaken, but rather who should bear the financial burden in the interim. The Court confirmed the FTT’s conclusion that the policy of the BSA places primary responsibility for the cost of remediation on developers, and that this responsibility is not contingent on the outcome of other claims but was meant to apply from the outset.
The Court further held that there was no good reason why interim funding should be at public expense in circumstances where it is just and equitable to impose such an order on a developer.
Ground 1.6 – the context of the applications to the Fund
The Appellants argued that the FTT failed to take into account that the applications to the Fund had been made at Triathlon’s request, that the scope of the remedial works had been tailored to meet the eligibility criteria of the Fund, and that Get Living, Triathlon and EVML had proceeded on the shared understanding that the remedial works would be publicly funded. The Appellant argued it was a “kick in the teeth” for Triathlon to have applied for RCO’s against SVDP and Get Living and that the FTT failed to consider this context when determining whether it was just and equitable to grant the orders.
The Court of Appeal rejected this argument. While it accepted that there had been agreement among the parties that EVML should apply for funding, and that those applications had been successful, this does not resolve the issue of whether public funding should continue to be relied upon when an RCO could justly and equitably be made against the developer, SVDP, and its parent company, Get Living.
The Court specifically considered whether Triathlon’s support for obtaining public funding was inconsistent with its later decision to pursue RCOs. It concluded that there was no such inconsistency. At the time, EVML had no other income, and the BSA had removed its ability to recover costs through service charges. In those circumstances, it was both reasonable and necessary to seek public funding to proceed with the works.
Accordingly, Triathlon’s actions did not prevent it from later seeking RCOs. The key question for the FTT was whether, despite the works being funded and underway, it remained just and equitable to make an RCO against SVDP and Get Living. The FTT had addressed this question directly, and the prior cooperation between the parties in securing funding provided no assistance but merely formed the setting for the question to arise.
Ground 1.7 – no expectation by the Fund
The Appellants argued that the FTT failed to take into account that the funding from the Fund was provided irrespective of the position under the BSA, such that the public authorities do not expect SVDP and Get Living to provide forward funding for the remediation works.
The Court of Appeal rejected this argument. It noted that under the relevant Grant Funding Agreement, the recipient of the funding (in this case, EVML) is required to use all reasonable endeavours to pursue claims. The Court emphasised that the Fund was not designed to provide permanent financial relief, but rather to act as a temporary measure to ensure the timely progress of remediation works, pending recovery from those who can be made legally liable.
The Court found that one cannot infer from the fact that EVML received public funding, that the relevant public bodies had no interest in the pursuit of RCOs where appropriate. On the contrary, the Court agreed with the FTT’s conclusion that there was a public interest in ensuring that public funds are recouped as promptly as possible.
Ground 1.8 – the changing identity of the beneficial owners of SVDP and Get Living
The Appellants argued that the FTT failed to give proper weight to the changing identity of the ultimate beneficial owners of SVDP and Get Living, particularly emphasising that the East Village development originated as a public project, from which the public, through the Olympic Delivery Authority (“ODA”), had benefited.
The Court of Appeal understood this argument as a reference to the fact that the current investors behind Get Living are not the same parties who initially acquired SVDP from the ODA. The FTT had addressed this point directly, stating that if you invest in a company, you take the risk of unforeseen liabilities attaching to that company.
The Appellants argued that Get Living had no involvement with the development and no association with SVDP at the time of the development. As such, they argued, Get Living could not be characterised as the kind of developer envisaged under the “paradigm” case for a RCO, namely, one that establishes a thinly capitalised special purpose vehicle (“SPV”) to carry out a development, sells off the asset, and then walks away.
The Court noted the FTT’s response which stated that the original purchasers had the commercial choice of acquiring the land outright or acquiring the corporate entity. They elected to acquire SVDP, and in doing so, accepted the possibility that liabilities might later attach to that company. The FTT also rejected the suggestion that the fact SVDP had previously been publicly owned had any bearing on the present legal or equitable position.
Ground 1.9 – terms of Grant Funding Agreement
The Appellants argued that the FTT failed to properly consider the terms of the Grant Funding Agreement (“GFA”) which they claimed expressly prohibit a claim against Get Living.
Clause 4.3.1(d) of the GFA stated that EVML “shall not claim the cost of any Qualifying Expenditure funded by the Funding from any Leaseholder” and “Leaseholder” was defined to include any person that is a party to a Lease Document or any person controlling a party to a Lease Document (which included Get Living’s subsidiaries). On that basis, the Appellants submitted that Clause 4.3.1(d) precluded EVML from pursuing Get Living for recovery of the funded costs. This, they argued, was directly relevant to the question of whether it was just and equitable to make a RCO against Get Living.
The Court of Appeal considered the argument put to the FTT by EVML that Clause 4.3.1(d) is to be understood as only preventing EVML from pursuing claims against leaseholders in their capacity as parties to the lease in question. The Court accepted that the clause was intended to prevent EVML from claiming costs which are covered by the Fund from leaseholders (and indeed to reimburse those who have already contributed).
Importantly, the Court rejected the Appellants’ broader interpretation. It held that the clause could not sensibly be read as barring EVML from pursuing claims against a party in a different capacity, such as a developer or associated entity, simply because that party might also meet the technical definition of a “Leaseholder.” The Court said to read the clause that way would undermine the core policy of the BSA which it cannot be supposed Government intended.
Ground 2: the FTT were wrong in concluding that an RCO can be made in respect of costs incurred before the relevant part of the BSA came into force on 28 June 2022
The Appellants argued that the FTT erred in concluding that a RCO could be made under section 124 of the BSA in respect of costs incurred prior to the relevant part of the BSA coming into force on 28 June 2022. In particular, this issue related to approximately £1.1 million of costs incurred by Triathlon before that date. The Appellants contended that section 124 does not have retrospective effect and that such historic costs were therefore irrecoverable.
The Court of Appeal rejected this argument. While it acknowledged the general presumption against retrospective legislation, it found that section 124 is intended to apply to remediation costs incurred before its commencement. The Court considered this interpretation to be consistent with the broader purpose of Part 5 of the BSA, which is to protect leaseholders from the financial burden of addressing building safety defects, including those arising from historical construction issues.
In reaching its conclusion, the Court of Appeal drew support from the Supreme Court’s reasoning in URS (which, in part, concerned the retrospectivity of section 135 BSA), noting that the same interpretation applied which is strongly in favour of section 124 also being given a retrospective interpretation. The Court held that section 124 is to be interpreted in such a way as to give effect to the objective of Part 5 of the BSA, of ensuring that leaseholders are not required to bear remediation costs for the rectification of historical defects and that those responsible for the defects should bear the financial responsibility.
The Court acknowledged that it would be unreasonable to assume Parliament intended to protect only those who had not paid, leaving those who had paid without any remedy. The Court of Appeal suggested that this interpretation aligns with the BSA’s purpose and avoids the unfair penalisation of responsible leaseholders or landlords.
Accordingly, the Court of Appeal confirmed that section 124 of the BSA has retrospective effect and that RCOs may be made in respect of costs incurred before its commencement.
Conclusion
As outlined at the beginning of the article, we have outlined five key takeaways from the case that you should be aware of. Should you require more information on any of the points raised, please contact the authors, your usual Beale & Co contact, or visit our website.
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