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

Where a public authority exercises contractual powers under a negotiated agreement, the contractual context may limit judicial review to fraud, corruption or bad faith. Statutory background, public-interest objectives, commercial pressure to contract, and incorporation of contractual terms into a statutory scheme do not by themselves create a sufficient nexus with a statutory power.

Even where wider review is considered, fairness is context-dependent; there is no universal right to receive third-party representations before a contractual decision. A decision-maker’s inquiry is sufficient if the information gathered was reasonably adequate. A matter must be so obviously material that omitting direct consideration would be irrational. Fitness may include trust, confidence, conduct and wider public-interest considerations, and may properly be assessed across an integrated corporate group.

Rydon Group Holdings Limited challenged three decisions made by the Secretary of State concerning remediation of unsafe cladding at three residential buildings. The decisions designated Rydon as a developer unfit to carry out remediation, required the buildings to remain within the Building Safety Fund under clause 7.7(B) of the Self-Remediation Terms, and refused transfer of the buildings under clause 13.2.

Rydon alleged procedural unfairness, breach of the Tameside duty, failure to consider material matters, predetermination, improper motive, irrationality and inadequate reasons. The central preliminary issue was whether the decisions, although made under a contract forming part of a statutory scheme, were subject only to the limited public-law review applicable to contractual powers.

1. Claim dismissed. The challenged decisions were made pursuant to contractual powers under the Contract and Self-Remediation Terms. The statutory provisions established the framework for the Responsible Actors Scheme but did not confer the powers used to make these decisions.
2. The contractual terms were negotiated with the building industry. The fact that developers faced serious commercial consequences if they did not sign, or that the contract pursued public-safety objectives, did not alter its contractual character. There was no relevant and sufficient nexus between the contractual provisions and a statutory power. Judicial review was therefore limited to fraud, corruption or bad faith. None was alleged or established. The availability or inadequacy of private-law remedies did not justify public-law relief.
3. Alternatively, the merits grounds failed. Fairness is context-sensitive. The Contract provided no pre-decision right to disclosure or representations, and Rydon had an opportunity to address the general concerns relevant to its fitness. There was no breach of natural justice.
4. The Tameside duty required only reasonable inquiry. The Secretary of State was not obliged to obtain further evidence about lessons learned or corporate change. The Responsible Actors Scheme and the corporate structure permitted consideration of group responsibility. Fitness was broader than technical competence and could include trust, confidence, conduct and public-interest considerations.
5. The matters relied upon as material had either been considered or were not so obviously material that omission would be irrational. The evidence of other remediation work did not determine fitness, and the officials’ views on transfer did not require express adoption by the Minister.
6. There was no real possibility of predetermination, improper motive or Wednesbury irrationality. The counterfactual discussion of Stage D status was explanatory, and the risk of delay was a rational consideration in choosing clause 7.7(B). Reasons for designation were adequate. The issue under section 31(2A) of the Supreme Court Act 1981 therefore did not arise.