Remediation Contribution Order for over £13 million granted against 76 companies in new Vista Tower decision

On 24 January 2025, the First Tier Tribunal (FTT) published their decision making a Remediation Contribution Order (RCO) in the sum of over £13,262,119 against 76 respondents as part of the ongoing litigation surrounding remediation works to Vista Tower. 

Background

Vista Tower is a 16-story residential block that drew significant attention after the secretary of state oversaw the granting of a Remediation Order against the freeholder, Grey GR, in May 2024 requiring them to resolve various fire safety issues before September 2025. Prior to the grant of the Remediation Order, Grey GR made an application to the FTT under Section 124 of the Building Safety Act 2022 (the BSA) requesting that a RCO be made against the building’s landlord Edgewater (Stevenage) Ltd and various companies associated with it, many of which share the same Edgewater name. Following a substantive hearing from 4 to 15 November, the Tribunal have now published their decision on the freeholder’s application. For more background on the Remediation Order and Vista Tower, please see Devonshires’ reporting on the topic here.

The Decision 

Building on the statutory test in the BSA first considered in Triathlon Homes LLP v Stratford Village Development Partnership & Others (2024), the Tribunal found that it was just and equitable to make a RCO against the landlord company and 75 other respondents out of the 96 named respondents. The decision goes through each of the 96 respondents, listing the reasons that they were or were not considered ‘associated persons’ for the purposes of Section 121 of the BSA and why it was or was not considered just and equitable to include them in the order. 

Unusually, the RCO provides that all 76 respondents are jointly and severally liable for the ~£13.2 million figure. The reasoning given was related to the structure of the respondent companies which the Tribunal said “were not actually run as carefully separated SPVs but as part of a fluid, disorganised and blurred network or structure”. The FTT continued, justifying the decision by saying that the “just and equitable test” in Section 124 deliberately accommodates wide orders such as this to ensure that “the pot is filled promptly” and the public money that was spent to carry out the remediation works is promptly recovered. 

In determining which of the 96 respondents it would be just and equitable to include in the order the Tribunal considered the following factors:

• The sector each company was involved in 
  • Most of of the specified respondents were involved in the property or building sectors, or were related to other companies that were
• The presentation of the companies to potential investors
  •  The shared name “Edgewater” would indicate some sort of group even if the company structures did not
•  The family links and shared owners between the companies 
  • The majority of the respondents had some public link to the Frankel or Dreyfuss families who were owners of the landlord company. 
• The separation of the companies’ finances
  • Often money was taken from one company and loaned or given to another when it was needed, indicating that the companies were viewed as a group. Receipt of money from the landlord company’s projects was stated as a linking factor.
• The impact the order would have on external investors 
  • The FTT gave “great weight” to the interests of third parties when deciding if it was just and equitable to include a respondent in the order, particularly those who did not hold security in the respondent companies. This consideration was qualified by the stipulation that the FTT would only consider interests publicly declared at Companies House as they stated that they generally consider it just and equitable to assess matters by reference to how the companies were presented to the public, even if that did not match the actual investors involved.

The FTT declined to make some respondents liable because of the very fact that the proposed RCO would make all respondents immediately jointly and severally liable. Certain respondent companies owned by “properly declared independent investors”, and some “borderline cases”, and those with limited links to the development, were not made the subject of the RCO. Such examples show the contours and boundaries created by application of these factors.

Given the unusual company structures involved in this matter, it is difficult to assess whether this model of joint and several liability will continue to be used in RCOs going forward. Similarly, the respondents have the opportunity to apply for this order to be varied until 14 February 2025 so it may be too early to draw long term conclusions. Watch this space! 

Should you want further information please contact William O'Brien or Zoe McLean-Wells.