![HT-2022-000311 - [2024] EWHC 3569 (TCC)](https://backend.juristeca.com/files/emisores/logo_yJUntHA.png){kind=logo}
Just and equitable
Just and equitable
The only case to date in which that short phrase has been considered is the decision of the First Tier Tribunal, albeit an FTT constituted by the President of the Upper Tribunal, Lands Chamber, and the Deputy President of the Upper Tribunal, Lands Chamber, in Triathlon Homes LLP and Stratford Village Development Partnership [2024] UKFTT 26 (PC). The application before the FTT was for a remediation contribution order under section 124 of the Building Safety Act 2022. That provides a somewhat different jurisdiction from the jurisdiction of the High Court to make a Building Liability Order but it is also a necessary element of the making of that order that it should be just and equitable to do so. The FTT was therefore concerned with the words that also appear section 130.
In paragraph 237, the tribunal said this:
"Section 124 gives no guidance on how the FTT is to decide whether it is 'just and equitable' in any particular case to make an order. Beyond stating the obvious, that the power is discretionary and should therefore be exercised having regard to the purpose of the 2022 Act and all relevant factors, it is not possible to identify a particular approach which should be taken."
There is however, to my mind a steer, in that paragraph to have regard to the purposes of the Act and to all relevant factors.
In terms of the purposes of the Act, at paragraph 266 the First Tier Tribunal said this:
"The obvious purpose behind the association provisions is to ensure that where a development has been carried out by a thinly capitalized or insolvent development company, a wealthy parent company or other wealthy entity which is caught by the association provisions cannot evade responsibility for meeting the cost of remedy in the relevant defects by hiding behind the separate personality of the development company. It seems to us that the situation of SVDP with its relatively precarious financial position and its dependence for financial support upon Get Living, its wealthy parent company, constitutes precisely the sort of circumstances at which these provisions are targeted."
This case seems to me to have similarities to that scenario in that Click St Andrews, to whom the relevant liability attaches, was a special purpose vehicle whose sole existence was to acquire the freehold of the property, in due course to develop the top floor of the property, and then to divest itself of the freehold as it sought to do through the Freehold Purchase Agreement. It was inevitably thinly capitalised and dependent on inter-company or inter-group loans for its financial wellbeing. Those are matters that were considered in the course of the applications for a freezing injunction and the evidence that was adduced at those hearings supports that position.
The difference, if there is a relevant difference, here is that the description of
Click Group Holdings as a wealthy parent may well be misplaced. Indeed, one of the reasons why the freezing injunction was not continued against Click Group Holdings was the perception that, in truth, it had no real assets. There remains considerable doubt as to the financial standing of Click Group Holdings.
Mr Levenstein, nonetheless, submits that it would still be just and equitable to make a Building Liability Order in respect of Click Group Holdings because the emphasis, as he put it, should be on the financial position of the first defendant rather than on the parent company. He relied in part on paragraph 255 in the decision in Triathlon in which the tribunal said this:
"The increase in value of Get Living's investment in East Village is not a matter to which we give great weight, although to the extent that it is relevant at all it is obviously a point in favour of making an order. It is common ground that Get Living has the resources to enable it to comply with any order the tribunal may make, but even if there had been doubt about that we think it would be an unusual case in which the source or extent of a respondent's assets or liabilities will carry much weight when deciding whether it is just and equitable to order it to bear the cost of remediation."
I respectfully agree with that approach. In the circumstances of this case, it seems to me that the indicators, at least prima facie, are very much in favour of the making of an order in respect of Click Group Holdings because it is the holding company of Click St Andrews, albeit by one step removed, and because the directing mind of the companies is common.