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

Paragraph 9 of Schedule 8 to the Building Safety Act 2022 applies to legal or professional costs connected with liability for a relevant building defect. The expression “relating to” is broad. It can include a landlord’s costs of applying to dispense with statutory consultation requirements for remedial works.

By majority, the Court held that, from commencement, no relevant service charge is payable under a qualifying lease, even where the underlying costs were incurred or demanded before commencement. The legislation does not reopen service charges already paid. The provision operates as a control of property use, rather than a deprivation of possessions, and its application is compatible with A1P1.

Adriatic owned Hippersley Point, a high-rise building requiring fire-safety remediation. The First-tier Tribunal dispensed with consultation requirements under section 20ZA of the Landlord and Tenant Act 1985, but made recovery of the application costs subject to a condition. The Upper Tribunal set aside that condition but held that paragraph 9 of Schedule 8 to the Building Safety Act 2022 prevented recovery of the costs from tenants with qualifying leases: [2023] UKUT 271 (LC).

The appeal concerned whether paragraph 9 covered the dispensation application costs, whether it applied to costs incurred before 28 June 2022, and whether retrospective application would breach A1P1.

1. Scope. The Court unanimously held that paragraph 9 covers the costs of Adriatic’s application to dispense with consultation requirements. “Any person” is not confined to a third party responsible for the defect. It can include the landlord incurring the costs. The words “relating to” are broad enough to include professional services connected with works required to remedy a relevant defect and with the landlord’s or leaseholders’ resulting liability.
2. Retrospective effect. Lord Justice Nugee, with whom Lord Justice Holgate agreed on this issue, held that the words providing that no service charge “is payable” mean that, from 28 June 2022, no relevant service charge is payable, regardless of whether the underlying costs had already been incurred or a demand had already been issued or had fallen due. Payments made before that date are unaffected. The statutory scheme’s purpose was to relieve leaseholders from immediate and often unaffordable building-safety bills. The presumption against retrospectivity did not justify preserving unpaid liabilities which Parliament intended to remove.
3. Lord Justice Newey dissented on this issue. He considered that the presumptions against retrospectivity and interference with property rights meant that Schedule 8 should not apply to costs incurred by 28 June 2022. He would have allowed the appeal.
4. A1P1. The Court unanimously held that retrospective application would involve control of the use of property, not deprivation of possessions. The landlord retained meaningful contractual rights under the leases. Applying the proportionality approach in [2013] UKSC 39, the measure pursued an important public aim, was rationally connected to it, and struck a fair balance in the context of the building-safety crisis. Section 3 of the Human Rights Act 1998 therefore did not require words to be read into paragraph 9.
5. The appeal was dismissed by majority.

• Court of Appeal (Civil Division). The appeal was dismissed by a majority. The Court unanimously upheld the Upper Tribunal’s conclusion on scope and A1P1, but differed on the temporal effect of paragraph 9. [2025] EWCA Civ 856
• Upper Tribunal (Lands Chamber). The First-tier Tribunal’s costs condition was held to be unlawful, but paragraph 9 of Schedule 8 was held to prevent recovery of the relevant costs from tenants with qualifying leases. [2023] UKUT 271 (LC)
• First-tier Tribunal (Property Chamber). Consultation requirements were dispensed with for urgent fire-safety works, subject initially to a costs order and subsequently to a condition preventing recovery of the dispensation application costs from the leaseholders.