Rydon Group Holdings Limited, R (on the application of) v Secretary State for Levelling Up Housing and Communities

A contractual decision may be amenable to judicial review where the contract is underpinned by statute and the public authority is exercising public functions. The existence of a contract does not necessarily confine an applicant to private law remedies or restrict review to fraud, corruption or bad faith. Public law grounds such as procedural fairness and rational decision-making may remain arguable, particularly where participation in the scheme is effectively compulsory and non-participation carries serious regulatory consequences. At the permission stage, the claimant need only show arguable grounds with a realistic prospect of success. Bad faith is a serious allegation requiring substantial evidence and will rarely be arguable. Judicial review claims concerning decisions affecting remediation funding are not necessarily academic merely because works are substantially complete.

The claimant developer entered into a self-remediation contract with the Secretary of State under arrangements established following the Grenfell fire. The Secretary of State designated the claimant as a designated participant developer, directed that three buildings should not be remediated by the claimant, classified them as Stage D Fund Buildings, and required the claimant to reimburse the Building Safety Fund.

The claimant sought permission for judicial review on grounds including procedural unfairness, failure to take relevant considerations into account, inadequate reasons, failure to investigate, predetermination, irrationality and breach of contractual requirements to act reasonably. The Secretary of State argued that the decisions were private contractual matters, that review was limited to fraud, corruption or bad faith, that there was an adequate alternative remedy, and that some challenges were academic.

1. Permission granted. Permission to apply for judicial review was granted on all grounds except the allegations of bad faith in grounds 1E, 2E and 3B. Permission was also granted to amend ground 1B.
2. The statutory context made it arguable that the self-remediation contract was the mechanism by which the statutory Responsible Actors Scheme was implemented. The Secretary of State was arguably exercising public functions in making designation and funding decisions for the statutory purposes in section 126 of the Building Safety Act 2022. The statutory underpinning and public character of the arrangements distinguished them from purely private contracts.
3. The claimant's agreement to the standard contractual terms was not readily characterised as consensual submission to a private contractual regime. An eligible developer faced serious consequences, including inclusion on a prohibitions list and restrictions on carrying on development and building work. It was therefore arguable that public law duties applied notwithstanding the contract.
4. The court declined to restrict the grounds of review to fraud, corruption or bad faith. Procedural fairness and rational decision-making remained arguable public law grounds. The court treated the observations in R (Redrow) v Secretary of State for Levelling Up, Housing and Communities [2024] EWCA Civ 651 as obiter and, in any event, directed to standing in funding challenges rather than amenability to judicial review.
5. The contractual dispute-resolution provisions did not provide an adequate alternative remedy because the proposed judicial review grounds were wider and judicial review could provide declarations and quashing orders as well as damages.
6. The challenges to the funding decisions were not academic. Compliance with public law duties could affect disputes about reimbursement, and further buildings remained subject to unresolved decisions.
7. The allegations of bad faith were not arguable. Bad faith is a strong accusation, difficult to prove and rarely encountered. The evidence did not approach the threshold required.