Building Liability Orders under the Building Safety Act 2022: St Andrews House

Part 5 of the Building Safety Act 2022 (‘BSA’) introduced a number of new avenues for redress for leaseholders and other parties who have suffered financial loss as a result of building safety defects that create a risk to life. For construction litigators, one of the most important is the creation of the ‘building liability order’ (‘BLO’) by section 130 BSA. Such an order cuts across our longstanding and conventional understanding of separate corporate liability for private law claims, by giving the High Court the power to make the liability of an original wrongdoer the liability of separate, but related, entities.

By a BLO, the ‘relevant liability’ of a body corporate may be made the liability of one or more specified bodies corporate. A ‘relevant liability’ is a liability that arises as a result of a building safety risk or under the Defective Premises Act 1972. A body corporate may be specified as such to a BLO if it is an ‘associate’ of the original body corporate, as defined in section 131 BSA. By sections 130 and 131, therefore, an ‘associated’ body corporate may be made liable for another entity’s liability arising out of building safety defects.

So far, however, even though a number of claims for BLOs have been commenced, there has been very little case law in respect of them. The leaseholders’ application for a BLO in 381 Southwark Park Road RTM Company Ltd v Click St Andrews Ltd and others provides an informative case study as an early decision in respect of this jurisdiction.

Image by Sofia Marquet.

The case concerned a block of flats known as St Andrews House, at 381 Southwark Park Road in London. The claimants included leaseholders in the block, as well as the residents’ right to manage (‘RTM’) company, which had been incorporated in order to acquire the freehold pursuant to the Leasehold Reform Housing and Urban Development Act 1993. Click St Andrews Ltd (‘Click St Andrews’) was a special purpose vehicle (‘SPV’), which owned the head lease and freehold of the block. It was a wholly owned subsidiary of Click Above Limited (‘Click Above’); in turn, Click Group Holdings Ltd (‘Click Group Holdings’) held all of the shares in Click Above.

The RTM company and Click St Andrews entered into a Freehold Purchase Agreement, under which Click St Andrews agreed to develop the block by replacing the existing roof structure with three modular apartments. It was anticipated that the RTM company would then acquire the freehold and grant new leases. Unfortunately, there was significant water ingress, which led to damage to the block, while it transpired that there were also fire safety, structural and other defects in the works.

This litigation had a protracted history, illustrating the difficulties that claimants often face when seeking to bring a claim arising out of construction defects. The matter first came before the Technology and Construction Court (‘TCC’) in July 2022, when the RTM company and the leaseholders applied for a freezing injunction against the developers’ corporate group: the injunction was continued in August 2022 by O’Farrell J ([2022] EWHC 2244 (TCC)). The liability trial ([2024] EWHC 3179 (TCC)) was heard in February to March 2024 by Jefford J, who handed down judgment in December 2024 (‘the Liability Judgment’). Subsequently, Jefford J ruled on the application for a BLO ([2024] EWHC 3569 (TCC)), which this blog post will focus on (‘the BLO Judgment’). Following this, Fixed Charge Receivers applied to sell some of the developer group’s assets which potentially might have fallen within the scope of the freezing injunction ([2025] EWHC 105 (TCC)).

In the Liability Judgment, Jefford J determined that the fire safety and structural defects arising out of breaches of the Freehold Purchase Agreement gave rise to a relevant liability within the meaning of section 130(3)(b) BSA.

Jefford J held in the BLO Judgment that Click Group Holdings was an associate of Click St Andrews. The Judge referred to section 131(4) BSA, which sets out that, ‘body corporate (X) controls another body corporate (Y) if X has the power, directly or indirectly, to secure that the affairs of Y are conducted in accordance with X’s wishes.’ Click Group Holdings held all of the shares of Click Above; in turn, Click St Andrews was a wholly owned subsidiary of Click Above. Click Group Holdings could therefore (albeit indirectly, through that corporate structure) secure that the affairs of Click St Andrews were conducted in accordance with its wishes. Jefford J also noted that both Click Group Holdings and Click St Andrews had the same controlling or directing mind, namely, Mr Emmett.

The principal issue that Jefford J had to consider in the BLO Judgment was whether it would be just and equitable to make an order. At the time of her decision, the only case that had considered this test was the decision of the First-tier Tribunal (albeit constituted by the President and the Deputy President of the Upper Tribunal, Lands Chamber) in Triathlon Homes LLP and Stratford Village Development Partnership [2024] UKFTT 26 (PC)(‘Triathlon Homes’), which was considered in a blog post by Susan Bright. While the Triathlon case was in the context of an application for a remediation contribution order under section 124 BSA, the same ‘just and equitable’ test is used. Jefford J highlighted paragraph 237 of the Tribunal’s judgment, which noted that the legislation does not provide any guidance as to how the test of ‘just and equitable’ is to be applied. The Judge identified that this passage did provide a steer in that the court or tribunal should have regard to the purposes of the BSA and all relevant factors. She also drew attention to paragraph 266 of the Tribunal decision, which referred to the scenario where a development has been carried out by a “thinly capitalized or insolvent development company”; the “obvious purpose behind the association provisions” was to stop a wealthy parent company from evading responsibility by “hiding behind the separate personality of the development company.”

The Judge considered that the St Andrews House case had similarities in that Click St Andrews was a special purpose vehicle whose sole purpose was to develop the property; it was dependent on inter-company loans for its financial wellbeing. Ultimately, Jefford J considered that the circumstances of the case were in favour of making a BLO in respect of Click Group Holdings because it was the holding company (albeit by one step removed) with a common ‘directing mind’.

Jefford J did consider that, in a different case, a respondent might argue that it had not had the opportunity to have a fair trial in respect of the making of an order because it had not participated in the original trial that had established that the original party was liable. This, however, was not a point open to Click Group Holdings, who did have the opportunity to participate in the trial.

The Judge also noted that the BSA did not require a party to be identified in pleadings or joined into proceedings before a BLO was made. It would not always be apparent that a particular company would be pursued: this might well depend on fluctuating financial arrangements, and the target company.

Jefford J therefore made a BLO in terms that the ‘relevant liability’ of Click St Andrews to the leaseholders was also the liability of Click Group Holdings to the same leaseholders. She refused to make an order that all losses (whatever the cause) arising from any liability on the part of St Andrews was part of the order, as the Act did not provide for this. At the same time, the Act did not require her to quantify the liability that the BLO extended to.

The 381 Southwark Park Road RTM Company Ltd litigation demonstrates how, in principle, the jurisdiction to make a BLO can be used to secure recovery from group holding companies and other associated entities where the original wrongdoer (such as an undercapitalised development company) is unlikely to be able to satisfy the claims of a group of leaseholders for building safety defects. As this author discusses in his chapter in Private Law and Building Safety, and as observed both by Jefford J and the Tribunal in Triathlon Homes, the court is given little steer as to how to determine what is just and equitable in the BSA.

The case is also another example of a court or Tribunal referring to the overall policy of the BSA when interpreting its provisions. For example, the Supreme Court in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21 made reference to the purpose and policy of the BSA in its decision on the effect of section 135 (in respect of limitation periods for claims in respect of section 1 of the Defective Premises Act 1972). Lord Hamblen and Lord Burrows noted at paragraph 106 that “ensuring that those directly responsible for building safety defects are held to account was central to the BSA and various of its provisions”. This policy ambition can be contrasted with the practical difficulties that the claimants faced in 381 Southwark Park Road RTM Company Ltd, however. The 381 Southwark Park Road RTM Company Ltd litigation demonstrates the potential hurdles and obstacles that such a group of claimants might encounter in asserting such a claim, which the BSA has not fixed.