Five companies linked to Manchester property developer Urban Splash have been ordered to repay a combined £46.5m that was used to fund post-Grenfell fire safety works at seven high-rise blocks.
The decision, published on Thursday (November 5), covers works at Burton Place in Castlefield; the Chips Building in New Islington; Moho Building on Ellesmere Street; The Box Works on Worsley Street; and the Three Towers on Dalton Street.
Court proceedings and findings
The Secretary of State for Housing, Communities and Local Government took the matter to court earlier this year, with tribunal proceedings starting in April. The tribunal found that all of the buildings had 'defects relating to fire-safety' which needed fixing.
A total of £60m was spent on the safety works, with £51m funded through the government's Building Safety Fund. Kerry Bretherton KC, representing the government, said on the opening day of the tribunal in April: "We are here because the taxpayer has had to pay some £50m to remediate these buildings. There is a responsibility to reclaim public monies that have had to be paid out only because Urban Splash did not do the right thing."
For Urban Splash, Nicholas Dennys KC responded: "We categorically did not fail to do the right thing, we did what we could, when we could."
Ruling and liability
The tribunal examined the 'central question' of the case – 'should the remediation costs funded by the taxpayer continue to be borne by the taxpayer, or should liability for all or part of them be transferred to the developer and/or to various entities alleged to be associated with it?'.
The companies named in the judgement are Urban Splash Limited; Urban Splash Developments Limited; Urban Splash Group Holdings Limited; Urban Splash Work Limited; and Stubbs Mill LLP. The judgement reads: "Most of that amount is payable to the Secretary of State in respect of remediation expenditure funded through the BSF [Building Safety Fund]."
The high-rise buildings in the case were developed by Urban Splash Limited between 2000 and 2008.
Response and next steps
Responding to the tribunal's decision, an Urban Splash spokesperson said: "While we are reviewing it and taking legal advice our focus is finding a constructive way forward with government while continuing to deliver much-needed homes and regeneration across the country. Making buildings safe and protecting residents and leaseholders is of fundamental importance to Urban Splash. We have remained closely engaged throughout the remediation process, and we are pleased that the Tribunal recognised the 'useful and responsible assistance' Urban Splash provided with the post-Grenfell investigations into these buildings. We are, however, disappointed by the decision to include a number of entities which played no part in the original development of these seven buildings."
The spokesperson, according to the Press Association, also said the scale of the liability was "significant for a business of our size". The Ministry of Housing, Communities and Local Government was approached for comment.
Martin McKeague, real estate litigation partner at Walker Morris which acted for the government in the proceedings, said: "This outcome is an important step in the government's efforts to recover public money spent on building safety remediation. This £46.5m decision demonstrates that responsibility for remediation can extend beyond the original developer to the wider enterprise, where it is just and equitable to do so."
