Case law is now starting to trickle through and currently, in the spotlight, are the First-tier Tribunal (FTT) cases concerning Remediation Orders (RO) and Remediation Contribution Orders (RCOs).

The case of Mistry and Ors v Wallace Estates Limited is an important case which adds to the growing case law emerging, particularly in respect of Part 5 and Schedule 8 of the Building Safety Act 2022 (BSA). This is now the third decision of the FTT concerning an application for a RO. The case is of particular interest as it had looked likely to provide clarification as to exactly what internal fire safety works would be considered a ‘relevant defect’ under the BSA.

Under the BSA the FTT can make a RO following an application made pursuant to S.123, which provides “interested persons” with a right to apply for a RO requiring a relevant landlord to remedy specified relevant defects in a specified relevant building by a specified time.

Facts

The case concerned Centrillion Point, a building located in Croydon comprising 12 storeys and 189 flats. The building was previously used for commercial purposes (as an office) and was converted for residential use in 2008.

A group of 14 leaseholders from the block applied for an RO against their landlord alleging various defects including to entrance and internal doors, compartment walls and floors and structural fire protection.

Unlike in previous cases, the tenants here, relied on expert evidence of a fire engineer, whilst the landlord relied on the expert evidence of a surveyor and compliance reports. Initially the Landlord challenged whether a number of the defects amounted to a “relevant defect” for the purpose of the BSA. However, approximately 3 weeks prior to the hearing, the landlord abruptly changed approach and advised the FTT that:

“Dr Woods has identified issues in acting in this matter connected with his professional indemnity insurance.

In view of the results of the GB Compliance Surveys (attached to Dr Woods’ expert report) and the Applicant’s own evidence, the Respondent does not intend to contest the Applicant’s expert evidence or to seek to call its own expert. It therefore considers that the focus of the Tribunal hearing should be the form and timings of the remediation order.”

What did the Court decide?

By the time the case came round to trial, as a result of the u-turn in approach from the landlord and their expert, there was effectively no dispute that (i) an RO should be made; or (ii) as to the defects, in broad terms, which should be the subject of the RO.

The main question that the FTT were left to consider was the precise terms of the RO and the time limit that should be specified for the relevant defect to be remedied.

Issue 1 – precise terms of the RO

This was the critical point of divergence between the landlord and tenants. The landlord (unsurprisingly) sought an order on more general terms, whilst the tenants were looking for an order with a high degree of detail.

The FTT favoured the approach of the landlord and confirmed that a high degree of specificity was not agreed, most notably commented that:

“… we agree with the submission that a remediation order should be sufficiently precise so that the Respondent can know what it must do to remedy the relevant defects and for enforcement purposes before the county court. The 2022 Act is not, however, prescriptive as to what works are necessary to remedy the relevant defect or defects, and the extent of precision will vary from case to case.”

Issue 2 – time limit for remediation

The leaseholders case was that completion of the works should be within one year, the landlord proposed two years. After considering the only direct evidence on the issue from the Respondent and noting the timescale “should not be unrealistic or unachievable”, the FTT took a pragmatic approach and ordered that the works be completed within 18 months.

Costs

The leaseholders also sought the following in respect of costs:

  • Costs under Rule 13 on the basis that the landlord had acted unreasonably – the FTT declined to make an order under this provision on the basis that any conduct liable to criticism was capable of reasonable explanation;
  • Under section 20c of the landlord & Tenant Act 1985, the leaseholders sought an order preventing the landlord from recovering the costs it had incurred in the proceedings through the service charge mechanism in the lease. The FTT considered it ‘just and equitable’ to make such an order. In most cases where an RO is obtained, this is likely to be the norm, however the FTT did make it clear that this decision was not be taken as making it an inevitable result of a successful application whenever an RO is made.

Where does this leave us?

In this case, consensus was reached as to what amounted to a relevant defect. We will therefore need to watch this space and await further FTT decisions to ascertain what view the FTT will take in this respect.

The case does, however, show that the FTT is ready to grant ROs in appropriate cases.

Whilst not commenting on what a relevant defect was, the case is useful in showing the circumstances in which the FTT will make an RO, the evidence it will require and the terms of the order it is prepared to make in light of that evidence.

If you have any questions regarding this article or need advice, get in touch with our Building Safety Team on buildingsafety@ellisonssolicitors.com.