Adriatic Land 5 Limited v Long Leaseholders at Hippersley Point & Anor

The Court of Appeal considered whether paragraph 9 of Schedule 8 to the Building Safety Act 2022 (the BSA) prevents a freehold owner from recovering service charges from leaseholders in respect of legal and other professional costs incurred in relation to remediation of relevant defects before the BSA came into force. The court addressed three issues: (1) whether costs of a section 20ZA dispensation application fell within paragraph 9's scope; (2) whether paragraph 9 applied to costs incurred before 28 June 2022; and (3) whether, if paragraph 9 otherwise had retrospective effect, it should be read down under section 3 of the Human Rights Act 1998 to avoid incompatibility with Article 1 of Protocol 1 (A1P1) ECHR.

The court unanimously held that paragraph 9 covers legal and professional services obtained by a landlord for a dispensation application because those services "relate to" a liability (or potential liability) incurred as a result of a relevant defect. The panel split on the retrospective question: Newey LJ would have read paragraph 9 as not applying to pre-commencement costs and so allowed the appeal, but the majority (Nugee LJ and Holgate LJ) concluded that paragraph 9 operates from 28 June 2022 and bars recoveries of the described service charges from leaseholders after that date, even where the costs were incurred earlier. The majority found that this construction best accords with the statutory scheme and purpose (protecting qualifying leaseholders) and that retrospective operation in this sense did not breach A1P1; therefore the appeal was dismissed.

Background and parties:

• Hippersley Point is a multi-storey residential building with long leases. Adriatic Land 5 Limited (freeholder) sought to recover service charges from leaseholders for costs it incurred in applying to dispense with statutory consultation requirements (under section 20 of the Landlord and Tenant Act 1985) so that urgent remedial building-safety works could proceed.
• The First-tier Tribunal granted dispensation but conditioned it in a revised decision so that Adriatic could not recover its costs from the leaseholders. Adriatic appealed to the Upper Tribunal which held the condition could not be upheld procedurally but concluded that paragraph 9 of Schedule 8 to the Building Safety Act 2022 prevented recovery of those costs from qualifying leaseholders. Adriatic appealed to the Court of Appeal.

Narrow issues before the Court of Appeal:

1. Scope Issue: Do costs of a dispensation application fall within paragraph 9(1) of Schedule 8 (legal or other professional services "relating to" liability incurred as a result of a relevant defect)?
2. Retrospective Construction Issue: If within scope, does paragraph 9 apply to costs incurred before 28 June 2022 (the commencement date)?
3. A1P1 Issue: If paragraph 9 would otherwise operate retrospectively, must it be read so as to avoid incompatibility with A1P1 (under section 3 HRA)?

Court's reasoning and conclusions:

• On scope, the court concluded paragraph 9 is wide. The phrase "any person" was read literally to include the person incurring the costs, and "relating to" was construed broadly to capture a real relationship between the professional services and the liability (or potential liability) caused by a relevant defect. The dispensation application, aimed at enabling recovery of remedial costs, therefore fell within paragraph 9.
• On retrospectivity the panel divided. Newey LJ favoured a purposive reading that protected landlords' accrued contractual entitlements to service charges when costs had already been incurred before commencement, relying on the presumptions against retrospectivity and against interference with property rights; he would hold paragraph 9 inapplicable to pre-commencement costs and allow Adriatic's appeal. Nugee LJ (majority) reasoned that the BSA's remediation provisions were intended to be backward-looking to address the historic cladding crisis, that Schedule 8 draws bright lines (including the qualifying-time tests) and that Parliament had chosen to protect qualifying leaseholders from (inter alia) legal and professional costs from the commencement date; accordingly paragraph 9 operates from 28 June 2022 and bars recovery of the described service charges after that date, even if the costs were incurred earlier. The majority preferred this construction as coherent with the statutory scheme (including caps, contribution tests and other remedial mechanisms) and necessary to achieve the legislative purpose.
• On the A1P1 argument the majority held that the retrospective effect as they construed it amounted to a control of use of property rather than a deprivation, engaged the wide margin of judgment Parliament has in social and economic policy, and did not breach A1P1; therefore section 3 HRA did not require a different construction. Newey LJ reached the same conclusion on A1P1 but would have decided the retrospective construction issue for the appellant.

Procedural posture: Appeal from the Upper Tribunal (Lands Chamber) decision of Edwin Johnson J ([2023] UKUT 271 (LC)).

The appeal is dismissed by a majority. The Court held (1) paragraph 9 of Schedule 8 to the Building Safety Act 2022 covers legal and professional services obtained by a landlord for a section 20ZA dispensation application because those services relate to a liability (or potential liability) incurred as a result of a relevant defect; (2) by majority the provisions of Schedule 8 (including paragraph 9) operate from commencement (28 June 2022) and, as construed, prevent qualifying leaseholders from being charged for such services after that date even where the costs were incurred earlier; and (3) construing paragraph 9 in that way did not require reading words into the statute under section 3 of the Human Rights Act 1998 because the measure did not violate Article 1 of Protocol 1 ECHR.

Appeal from the Upper Tribunal (Lands Chamber), Edwin Johnson J (Chamber President) [2023] UKUT 271 (LC). The Court of Appeal (Newey LJ, Nugee LJ, Holgate LJ) delivered judgment on 8 July 2025, dismissing the appeal by majority.