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

MR JUSTICE CHOUDHURY : Introduction

1. The Claimant, Rydon Group Holdings Limited (“ Rydon ”), is the parent company of Rydon Maintenance Limited (“ Rydon Maintenance ”), which was the principal contractor for the refurbishment of Grenfell Tower before the tragic fire in 2017 and was a Core Participant in the subsequent Grenfell Tower Inquiry (“ the Inquiry ”). On 28 February 2024, the Secretary of State for Levelling Up, Housing and Communities (“ the SoS ”) made three decisions relating to the remediation of unsafe cladding on three high-rise residential buildings for which Rydon was the developer (“ the Cable Street Buildings ”). Those decisions were: (a) to determine that Rydon is a Designated Participant Developer (“ Designated PD ”) and therefore “unfit” to carry out the remediation works (“ the Designation Decision ”); (b) to direct that remediation should take place through the Building Safety Fund (“ BSF ”) pursuant to Clause 7.7(B) of the Self-Remediation Terms (“ SRTs ”) of the contract between Rydon and the SoS (“ the Clause 7.7(B) Decision ”); and (c) pursuant to Clause 13.2 of the SRTs that the Cable Street Buildings should remain within the BSF and should not be transferred to Rydon for remediation in any event even if Rydon was not a Designated PD (“ the Clause 13.2 Decision ”).

2. Rydon challenges these decisions on various public law grounds; leave having been granted by Lang J at a permission / interim relief hearing on 10 December 2024. The first three Interested Parties are the Resident Management Companies (“ RMCs ”) responsible for each of the Cable Street Buildings. The Fourth Interested Party (“ KDG ”) is the managing agent for the RMCs. Background Grenfell Tower Fire and Inquiry

3. On 14 June 2017, a fire destroyed Grenfell Tower. Seventy-Two people lost their lives in the fire. The first report of the Inquiry, published on 30 October 2019 (“ Phase 1 report ”), concluded that the defining factor in the rapid and all-consuming spread of the fire was the presence of combustible materials in the cladding installed during the refurbishment of Grenfell Tower in 2014 to 2016. The Phase 1 report also considered a host of other defects which accelerated the rate of spread.

4. Several current and former employees of Rydon Maintenance gave oral evidence during Modules 1 and 2 of Phase 2 of the Inquiry. That evidence raised concerns as to, amongst other things, Rydon Maintenance’s approach to building safety. The eventual findings in the second report of the Inquiry, published on 4 September 2024 (“ Phase 2 report ”), included the following: “We consider that the principal contractor, Rydon, also bears considerable responsibility for the fire. It gave inadequate thought to fire safety, to which it displayed a casual attitude throughout the project and its systems for managing the design work did not ensure that its sub-contractors and consultants properly understood their different responsibilities. Rydon itself did not understand where responsibility for individual decisions lay and as a result it failed to co-ordinate the design work properly.” Background to the contract between Rydon and the SoS (“ the Contract ”)

5. In the aftermath of the Grenfell Tower tragedy, it became apparent that many high-rise residential buildings around the country posed a danger as a result of deficiencies in their design and construction. As an emergency interim step to ensure that remediation of the most critically at-risk buildings was achieved swiftly, the Government made funding available for replacement of unsafe cladding on certain residential buildings via the BSF and similar schemes (“ Funds ”). However, it was considered not practicable to remediate all unsafe buildings in this way.

6. In light of these matters, the SoS wrote an open letter in January 2022, calling on developers to agree to fund or undertake at their own cost the remediation of unsafe buildings (referred to here as “ self-remediation ”). In March 2022, the SoS published a voluntary pledge letter ( “Pledge” ) by which developers could publicly commit to the principle of self-remediation. The Pledge was drafted with the input of the Home Builders Federation (“ HBF ”). Approximately 50 major developers were approached, including Rydon. Rydon did not respond to this invitation as it regarded the Pledge as directed at Britain’s “largest housebuilders” and, as a SME, it did not consider itself to be a large or major developer. Rydon is not a member of the HBF.

7. Between July 2022 and January 2023, the SoS engaged in negotiations with developers in the industry with a view to settling contractual terms to give binding effect to the Pledge principles. The SoS considered it desirable that a single set of terms be adopted. The negotiations were open to the developers at whom the Pledge was aimed and were largely mediated through HBF, which represented all developers’ interests and acted as a conduit for individual comments on the draft SRTs. Developers could also provide comments to the Department for Levelling Up, Housing and Communities (“ the Department ”) directly. Whilst Rydon was contacted on a number of occasions, it considered the Department’s emails as little more that a “general distribution” from a government department and did not respond. The emails to Rydon included an invitation on 19 August 2022 to sign the Pledge, and an email dated 5 September 2022, inviting comments on the draft terms to be sent directly to the Department or via HBF, which was coordinating comments on behalf of Pledge signatories and other developers including those who were not members of HBF.

8. Negotiations about the SRTs concluded in January 2023 and the SRTs were opened for signature on 30 January 2023. The SoS made it clear that he expected developers to “ sign the contract as soon as possible, and no later than Monday 13 March 2023…”

9. By an email dated 2 March 2023, the SoS sent developers (including Rydon) the final version of the Contract and the SRTs inviting them to submit mark-ups of the Contract setting out corporate details and buildings information. Rydon wrote to the Department on 10 March 2023 pointing out that Rydon Homes was a “small SME housebuilder” , and that it had understood that the Department would be focussing on large housebuilders / developers first and then rolling out its proposals to SME housebuilders at a later stage.

10. On 23 March 2023, Rydon wrote to the Department stating that: “Rydon Homes had no involvement in [the Grenfell] refurbishment project, nor is it subject to the public inquiry or the police investigation. As such, Rydon Homes directors cannot approve a contract which includes provisions which may impact upon the company, for events not within its control. The provisions of Clause 7 and the definition of ‘Designated PD’ would need to be amended in that regard.” (Emphasis added)

11. By a response dated 28 March 2023, the SoS confirmed that the SRTs were in final form and would be identical for all signatories.

12. At a subsequent meeting between the Department and Rydon on 24 April 2023, Rydon expressed concern that it could “ in theory already be deemed to be caught by the definition of Designated Participant Developer ”. Ben Llewellyn for the Department confirmed that the terms could not be varied, and that the purpose of Clause 7 of the SRTs “ was that if Rydon was deemed to be unfit to carry out remedial works following the outcome of the inquiry or a police investigation, then Ministers could not be seen to be allowing Rydon to carry out remedial works on resident buildings in these scenarios ”: Rydon’s note of meeting. Rydon proposed a side-letter containing an agreement that would provide comfort around what was termed “the Grenfell clause” so that it was able to sign the Contract in its current form. Proposals for any such amendment or side-letter were rejected by the Department. Building Safety Act 2022 and RAS Regulations

13. Meanwhile, the Building Safety Bill was introduced to Parliament on 5 July 2021, and the (“ Building Safety Act 2022 BSA 2022 ”) received Royal Assent on 28 April 2022. The BSA 2022 makes provision for the remediation of certain defects in buildings with two or more dwellings that are at least 11m high or have at least 5 storeys.

14. Section 126-127 of the BSA 2022 provide for the making of regulations to establish building industry schemes to secure the safety of people and improve building standards, including the remedying of defects in existing buildings or contributing to the costs associated with remedying those defects. Sections 128-129 make further provision for the making of regulations to prohibit prescribed persons from carrying out development of land in England. Section 168, BSA 2022 makes general provisions relating to the regulations made under BSA 2022.

15. The regulations made pursuant to the enabling power in the BSA 2022 are the Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 (“ RAS Regulations ”) which came into force on 4 July 2023. Regulation 5 establishes a scheme known as the Responsible Actors Scheme (“ the Scheme ”). The purpose of the Scheme is to secure the safety of people in or about buildings and to improve the standard of buildings by securing that those in the building industry remedy defects in buildings relating to fire safety and contribute to costs associated with remedying such defects.

16. Regulations 6 – 8 of the RAS Regulations set out the eligibility criteria to be a member of the Scheme, with Regulation 7 making it clear that a company is to be treated as responsible for the development or refurbishment of a building if another company in the same group is so responsible. Regulations 13 and 14 make provision for the SoS to “invite” eligible persons to apply for membership of the Scheme.

17. Regulation 14(2) provides that where a person is “invited” to become a member of the Scheme, he must within 60 days either enter into a Self-Remediation Contract (if he has not already done so) or give notice to the SoS, supported by evidence, that neither he nor any body corporate in the same group is eligible to join the Scheme.

18. If the person “invited” to join the Scheme does not comply with regs. 14(2)(a) or (b) then, after the expiration of 60 days, he will be treated as a person who is eligible to join the Scheme but has not joined and will have his name published on the prohibitions list (“ the Prohibitions List ”) – i.e. a list prepared, maintained and published by the SoS and to which reg. 28 applies.

19. Where reg. 28 applies, the applicable person is prohibited under reg. 29 from: (1) carrying out major development of land in England (i.e. development of 10 houses or more); and (2) under reg. 33, is subject to a range of building control prohibitions. These prohibitions in respect of building control would affect future and current or ongoing developments.

20. Regulation 21 provides: “Self Remediation Terms 21.—(1) Subject to paragraph (3), a member of the scheme must enter into a contract with the Secretary of State (“a Self Remediation Contract”) which contains terms that apply to contracts between a developer and the Secretary of State providing for the developer to undertake the remediation of the buildings for which they are responsible, as published by the Secretary of State on 16th March 2023 and referred to as the developer remediation contract (“the Self Remediation Terms”). … (3) A member of the scheme who has entered into a contract with the Secretary of State on the same or substantially the same terms as the Self Remediation Terms before the date on which these Regulations come into force is to be treated as satisfying the scheme condition in paragraph (1), and references to Self Remediation Contract in these Regulations are to be treated as including references to the terms of such a contract.”

21. The SRTs referred to in reg. 21 as having been published by the SoS on 16 March 2023 were those that had been the subject of negotiations as described above. Relevant contractual provisions

22. The Contract is in two parts: a deed of contract and a Schedule containing the SRTs. By Clause 2 of the Contract, the SRTs “ are part of and will be deemed incorporated into this Contract ”.

23. The SRTs make clear that Participant Developers’ (“ PDs’ ”) obligations extend not only to buildings they developed, but also to buildings developed by other companies in their group. Clause 20.4 of the SRTs, for example, provides: “To the extent that a PD Group Company [as defined] that is not the Participant Developer played a relevant role in the Original Works, any obligation on the Participant Developer in respect such Building under these Self-Remediation Terms and/or the Contract and any reference to the Participant Developer doing or being obliged to do any act in respect of such Building under these Self-Remediation Terms and/or the Contract, will also comprise an equivalent obligation on the relevant PD Group Company and accordingly an undertaking by the Participant Developer to procure that the relevant PD Group Company undertakes such obligation or carries out such act.”

24. As regards buildings for which applications have been made to the Funds, the basic scheme of the SRTs is that PDs agree to repay monies that have been paid towards remediation projects for their buildings, but buildings may be ‘transferred’ out of the relevant Fund for the PD to carry out remediation work themselves.

25. Whether and in what circumstances a building may be transferred depends on what stage of the application process it has reached. For these purposes buildings within the Funds are divided into four stages, A to D. For the purposes of these proceedings, Stages C and D are the most relevant (Annex 1, SRTs): “‘ Stage C Fund Building ’ means a Building for which [at the date of the Contract]: (A) DLUHC has communicated an award of funding…; and (B) DLUHC has not signed a funding agreement with the applicant Responsible Entity … ‘ Stage D Fund Building ’ means a Building for which [at the date of the Contract]: (A) DLUHC has communicated an award of funding…; and (B) DLUHC has signed a funding agreement with the applicant Responsible Entity …”

26. Stage C Fund Buildings, where an award of full funding has been communicated but a grant funding agreement (“ GFA ”) has not yet been signed, by default remain within the Funds. Clause 13.1 requires PDs to reimburse all monies paid or agreed to be paid by the Fund, subject to Clause 13.2: “… a PD will not be required to make a payment in accordance with Clause 13.1 if it requests in writing to DLUHC (and DLUHC, acting reasonably, accepts such request) that the relevant Stage C Fund Building is transferred out of the relevant Fund to the PD, for the PD to carry out and complete the Works in respect of it.”

27. In order to request a transfer under Clause 13.2, the PD must “ [confirm] in writing that the target dates for completing the Works are not later than the corresponding dates that would apply to that Building should it not be transferred from the relevant Fund to the PD (or unless DLUHC otherwise consents to such transfer) ” (Clause 13.3, SRTs). Beyond this, the factors which the SoS may take into account are not prescribed by the Contract, nor is there a specific procedure to be applied in so doing.

28. To assist in considering whether or not to transfer Stage A, B and C Fund Buildings under the terms of the Contract, the SoS has adopted non-binding internal guidance in the form of a policy document – the “ Revised criteria for developer transfer: Policy for requests for BSF transfers ” (“ Policy Document ”) which provides “8 non-exhaustive circumstances of when this discretion can be reasonably exercised. In practise the discretion will be used in a minority of transfers.” These include: (i) whether the SoS has confidence in the PD’s stated timescales for carrying out the works; (vii) whether the PD’s financial standing is in doubt; and (viii) whether they are a Designated PD.

29. Where a building has reached Stage D (i.e. a GFA has been signed) it must remain within the relevant Fund.

30. Where a building is transferred, the PD is obliged to: (i) reimburse any costs incurred by the relevant Fund up to the point of transfer; and (ii) carry out or procure suitable remediation works or fund the Responsible Entity (“ RE ”) to do so (Clauses 12.4-12.5, 12.12-12.13, 13.5-13.6, SRTs). Where a building is not transferred, the obligation is to reimburse any expenditure incurred by the BSF (Clauses 12.7, 12.15, 13.1, 13.8, SRTs), subject to a process of challenge: Clauses 13.17-13.25 of the SRTs.

31. Where a PD is a ‘Designated PD’, the foregoing provisions are supplemented by Clause 7.7 of the SRTs. Annex 1 of the SRTs defines a ‘Designated PD’ as, broadly speaking, any PD that the SoS considers “unfit” to carry out remediation works by reason of: (A) the PD being subject to a criminal prosecution for an offence relating to building safety; (B) the PD being subject to an investigation for a criminal offence; (C) the PD’s conduct being under consideration by a public inquiry; and (D) the PD being repeatedly in material breach of its obligations under the Contract. For present purposes (C) of the definition is the most relevant. In full, it provides that a Designated PD is a PD that: “…has been the subject of significant criticism in the findings of a public inquiry, or is currently a person whose conduct is under consideration by a public inquiry, regarding their performance or behaviour in connection with building safety matters such that the PD is reasonably considered by DLUHC to be unfit to carry out or procure the carrying out of Works in accordance with these Self-Remediation Terms and/or the Contract…”

32. Where the SoS considers a PD meets this definition, she may make a direction under Clause 7.7, whereby the Department may: “… either in relation to all relevant Buildings Requiring Work or such Buildings Requiring Work as it may determine, elect in its sole discretion (but acting reasonably) to: (A) require the PD to fund the Responsible Entity… to undertake or procure the Works in accordance with Clause 6.1(iii), and not to undertake or procure the Works at its own cost in accordance with Clauses 6.1(i) and/or 6.1(ii) … (B) require the PD not to undertake or procure the Works at its own cost…, and to designate the PD’s Buildings as Stage D Fund Buildings, such that the PD will reimburse the relevant Fund in accordance with Clause 13.”

33. Annex 1 to the SRTs also specifies that the “Standard” to be achieved in respect of external wall construction is the Publicly Available Standard PAS 9980 (“ PAS 9980 ”). This is a code of practice which sets out the current methodology for carrying out a Fire Risk Appraisal of External Walls (“ FRAEW ”).

34. Previous guidance issued by the Department as to the standard to be achieved in respect of a building’s external walls was set out in a Consolidated Advice Note (“ the CAN ”). The CAN was withdrawn on 10 January 2022 and replaced by PAS 9980 because of concerns that in some cases the CAN standard was being wrongly interpreted and used to justify an excessively risk-averse approach to building safety. Rydon enters into Contract and joins RAS

35. On 21 July 2023 Rydon was invited to apply to join the RAS. To join the Scheme, eligible developers had to sign the SRTs. Failure to do so would, as set out above, lead to the developer being added to the Prohibitions List. On the same date, Rydon was informed by KDG that the RMCs had applied to the BSF in respect of remediation works to the Cable Street Buildings. Rydon had not been aware before this date that such applications had been made. In fact, that application process had commenced in 2021.

36. Approval for full funding was communicated to the RMCs on 21 August 2023 (for Arta House and Ikon House) and 24 August 2023 (for Stylus House), at which point the buildings reached ‘Stage C’ under the Contract. The SoS then worked with the RMCs and the Greater London Authority (“ GLA ”) to draw up the GFAs, with planned start dates for the works being 30 October 2023 (Ikon House), 15 December 2023 (Arta House) and 15 January 2024 (Stylus House). The terms of the GFAs were not disclosed to Rydon until much later in June 2024.

37. On 15 September 2023, Rydon entered into the Contract. As at that date, the Cable Street Buildings were at Stage C in that grant funding had been approved although the SoS had not signed an agreement to that effect. On the same date, pursuant to Clause 13.2 of the Contract, Rydon applied to the Department to request the transfer of the Cable Street Buildings from the Funds to Rydon (“ the Transfer Request ”) to allow Rydon to undertake the remediation works. In its letter of the same date, Rydon stated that it would be able to commence the remediation works within 28 days of confirmation that the Transfer Request had been accepted.

38. On 18 September 2023 Rydon formally applied to join the RAS and was registered as a member. The process leading to the Decisions

39. Following receipt of the Transfer Request the SoS received a letter from the Deputy Mayor of London dated 21 September 2023, and from the RMCs dated 25 September 2023, setting out objections to the transfer of the buildings to Rydon for remediation works. These letters were not provided to Rydon for comment at the time. On 27 September 2023, officials met with the RMCs and KDG.

40. The SoS sought further information from Rydon, to evaluate the Transfer Request and the feasibility of the works proposed. Rydon provided various responses in early October 2023, and officials from the Department discussed those responses with representatives of Rydon by videoconference on 9 October 2023. Rydon’s proposed works were to the PAS 9980 standard.

41. The SoS commissioned a third party (Jacobs Engineering UK Ltd) to review and advise on a desk-top assessment submitted by Rydon identifying the scope of works. Jacobs’ conclusion was that Rydon’s proposed approach to the remediation was “a reasonable alternative” and that Jacobs would support the Transfer to Rydon if that was the approach the Department chose to take.

42. The Department collated information relevant to the Transfer Request and produced a detailed decision dossier (“ Dossier ”) considering all relevant matters then before the Department. The Dossier, which is described by the SoS as “a working document which evolved over time” , was used to inform submissions developed for consideration by the SoS. The Dossier sets out various considerations deemed to be relevant to the Designation Decision (and the Clause 7.7(B) Decision and Clause 13.2 Decision).

43. A Ministerial Submission (“the First Submission ”) was prepared and put to the SoS on 14 December 2023 for a decision as to both designation and transfer. The version of the First Submission before the Court is partially redacted for reasons of Legal Professional Privilege. Whilst this is queried by the Claimant, no issue arises before me on the question of privilege. The First Submission summarised the issues as: “(1) Whether to ‘designate’ Rydon Group Holdings Limited (‘Rydon’’) as a developer that is unfit to carry out or procure remediation for which it is responsible under the Developer Remediation Contract and – if you decide not to designate Rydon – (2) whether to accept a request by Rydon, a signatory of the Contract, to take responsibility for remediating [the Cable Street Buildings] that are in the Building Safety Fund (BSF)”.

44. The First Submission contained the ‘Recommendation’ that the SOS: (i) notes that the case is being brought to his attention because “ it carries a higher than usual legal and reputational risk, and may involve a clause in the Contract that has not been material to previous transfer decisions ”: (ii) decides whether to designate Rydon under Clause 7.7 of the Contract; (iii) if he decides to so designate Rydon, decide the route by which the Cable Street Buildings should be remediated choosing between Option 1A (which would require Rydon to fund the RE to carry out remediation to a scope set against PAS 9980) or Option 1B (which would leave the buildings in the BSF with the effect that they would be remediated to the now withdrawn CAN standard with Rydon being expected to reimburse the Department); and (iv) if he decides not to designate Rydon, decide whether to agree or to reject the request to transfer the responsibility for remediating the Cable Street Buildings to Rydon. The First Submission did not recommend rejecting the Transfer Request due in part to the fact that Rydon was already involved in carrying out remediation works elsewhere. It was estimated that under Option 1A, the scope of works would be around £0.6m whereas under Option 1B, it would be £10.7m.

45. The First Submission had four annexes, A to D. Annex A was the letter from the Deputy Mayor of London dated 21 September 2023. Annex B was Rydon’s letter requesting the Transfer.

46. Annex C to the First Submission sets out an “Analysis of evidence on whether to designate Rydon” and highlights certain matters arising out of the fact that Rydon’s conduct and performance in connection with building safety has been under consideration by the Inquiry, and which the SoS may consider potentially relevant to his decision. These included the evidence that Rydon’s failings reflected the “ prevailing culture and practice in parts of the industry ”, that there will likely be other developers guilty of similar practice whose BSF transfer requests have been met; that Rydon may be able to evidence changes in its practice and management since the impugned refurbishment of Grenfell Tower in 2014/15; and that such refurbishment was carried out by Rydon Maintenance rather than Rydon Group.

47. Annex D to the First Submission sets out an “ Analysis of Rydon’s transfer request using standard criteria ”. Of the eight criteria (a) to (h) set out in the Policy Document, Annex D identifies the following as being the most pertinent: a) – whether the Department has confidence that the developer will meet the target timelines under the Contract; b) – whether the BSF applicant has a legitimate expectation that works would continue in the BSF; h)- whether the developer is deemed to be a Designated PD.

48. The First Submission advised that there was insufficient evidence in relation to (a) and (b), and that (h) was dependent on the Designation Decision.

49. The SoS indicated his initial decision by way of a readout on 4 January 2024. That initial decision was to designate Rydon under Clause 7.7 of the Contract, for the Cable Street Buildings to be remediated to the CAN standard, and for Rydon’s designation to apply in respect of all buildings where works were ongoing. A draft decision letter to that effect was produced and put to the SoS on 8 February 2024.

50. A second ministerial submission (“the Second Submission ”) was sent to SoS on 8 February 2024. This recommended that SoS designate Rydon in respect of the Cable Street Buildings but recommended that he should not make a decision about the status of the buildings where work is not confirmed, complete or at an advanced stage “ in order to avoid unnecessary delay to remediation ”. The Second Submission went on to recommend that the SoS send a letter to Rydon in the form of a draft provided to inform Rydon of the decisions made. In a readout to the Second Submission, the SoS confirmed that whilst he had decided to designate Rydon in respect of the Cable Street Buildings, he would not issue a direction in respect of those other buildings.

51. The SoS’s reasons for his decisions are set out in the final approved Decision Letter of 28 February 2024. Since the decisions

52. The SoS signed the GFAs relating to the Cable Street Buildings on 1 March 2024 and the remediation work began thereafter, on 18 March 2024.

53. The Claimant’s letter before claim was sent on 5 April 2024 and its claim was issued on 9 May 2024.

54. As set out above, the Phase 2 Report was published on 4 September 2024.

55. On 10 December 2024, permission to apply for judicial review was granted by Lang J in respect of all grounds save for those comprising allegations of bad faith. Agreed List of Issues

56. The parties have helpfully agreed a list of issues to be determined. Re-ordering these issues slightly to correlate with the Grounds as set out in the Claimant’s Skeleton Argument and its oral submissions, the issues are as follows:

57. Amenability / Scope of Judicial Review : i) Are the decisions under challenge amenable to judicial review on any or all of the grounds pleaded by the Claimant? ii) In light of the decision as to amenability, does the Claimant have an alternative remedy such that the application for judicial review should be dismissed?

58. Subject to these points: i) Ground 1 – Breach of Natural Justice: a) Was there unlawful procedural unfairness by a failure to provide the Claimant with an opportunity, prior to the decisions, to respond to representations by third parties: (i) in respect of the Designation Decision; and (ii) in respect of the Clause 7.7(B) Decision? ii) Ground 2 – Tameside duty: a) In respect of the Tameside (duty of inquiry) challenge to the Designation Decision: i) is the ground as now pursued in the skeleton argument properly pleaded and, if not, should the ground be excluded from consideration (subject to any application for permission to amend)? ii) Subject to the above, was there a breach of the Tameside duty by failing to request that Rydon provide further documents? iii) Ground 3 – Failure to take into account material considerations: a) Was there an unlawful failure to take into account material considerations: i) in respect of the Designation Decision; and ii) in respect of the Clause 7.7(B) Decision? b) Was it irrational to take into account the risk of delay in respect of the Clause 7.7(B) Decision so as to render that Decision unlawful? iv) Ground 4 – Predetermination: a) Would a fair-minded and informed observer conclude that the Defendant had ‘predetermined’ either: i) the Designation Decision; ii) the Clause 7.7(B) Decision; or iii) the Clause 13.2 Decision (transfer)? v) Ground 5 – Improper Motive: a) In respect of the ‘improper motive’ challenge to the three decisions: i) is the ground as now pursued in in [99(1)] of the Claimant’s Skeleton Argument (improper motive as being contrary to the RAS Regulations) properly pleaded and, if not, should the point be excluded from consideration (subject to any application for permission to amend)? ii) Subject to the above, did the Defendant make any of the three decisions under challenge for an ‘improper motive’? vi) Ground 6 – Wednesbury Irrationality / failure to provide reasons: a) Were any of the three decisions under challenge irrational so as to render them unlawful? b) Were adequate reasons given for the Designation Decision (Ground 1(c))?

59. Section 31 (2A) of the Supreme Court Act 1981 : i) But for any public law error found by the Court, is it highly likely that the same decisions would have been made?

60. I shall deal with each of these issues / grounds in turn. Amenability to and Scope of Judicial Review Amenability - Submissions

61. Mr Litton KC for the Claimant submits that the BSA and the RAS Regulations provide the statutory architecture for the Scheme. The Scheme is given effect by the Contract and the SRTs which are expressly identified in the legislation, and Rydon was effectively compelled to enter into the Contract and the SRTs in order to avoid being placed on the Prohibitions List. This element of effective compulsion arising from the absence of any commercial choice but to accept the SRTs meant that the Contract is plainly not a freely negotiated contract entered into at arm’s length, and acceptance of the SRTs was a condition of being able to continue in business. Mr Litton submits that the Contract was, in these circumstances, not a commercial agreement but rather a means of enforcing statutory objectives in the public interest. The consequence of that is that the policy reasons that led the Courts in other cases involving a contractual context to limit the scope of judicial review are absent here, such that the full panoply of public law remedies ought to be available, notwithstanding the contractual context.

62. Sir James Eadie KC for the Defendant, submits that the established principle is that in deciding whether or not to enter into a contract, a public authority is not subject to judicial review save where there is an allegation of fraud, corruption or bad faith: see Mercury Ltd v Electricity Corporation of New Zealand Ltd [1994] 1 WLR 521 at 529 B. That principle applies here where the impugned decisions were all made pursuant to contractual powers. Sir James submits that it is not accurate to describe the situation as one of ‘compulsion’ in circumstances where the SRTs were the product of detailed negotiations in which Rydon chose not to participate. In short, whilst the SoS is subject to judicial review, the potential grounds are limited to those set out in Mercury , none of which applies here. Amenability - Discussion

63. The issue under this part is not whether the SoS’s decisions are amenable to judicial review – it is agreed that they are – but as to scope of such review and in particular whether, as the Claimant contends, the full range of judicial review grounds are available, or, as the Defendant contends, only those arising out of allegations of fraud, corruption or bad faith.

64. The more limited scope of judicial review as set out in Mercury was considered more recently by the Privy Council in State of Mauritius v CT Power Ltd [2019] UKPC 27 , a case concerning the negotiation of a commercial contract between the State and a private company for the construction of a new electricity generating plant. At [63] ff, Lord Sales considered the breadth of the State’s discretion in undertaking negotiations: “63. The power of the Minister of Energy to undertake negotiations with CT Power as part of the conduct of the business of the Government is a wide one, conferring on the Minister a very wide discretion as to how best to proceed. The implication is that the Minister is permitted to participate in the commercial market in the usual way, ie through the exercise of the full bargaining power available to the Government in order to secure the best commercial deal possible and thereby promote the public interest. With that end in view, a court should be astute to ensure that application of public law standards in relation to the Minister does not cut down or undermine that bargaining power. Nor should public law standards be applied in such a way as to give a potential contracting counterparty a negotiating advantage which has not been bargained for .

64. In negotiating a commercial contract on behalf of the Government, the Minister, as a public authority, is not entirely free from constraints arising under public law. He is obliged to comply with basic public law standards which ensure that he properly seeks to promote the public interest. Accordingly, his decision-making as to how to conduct negotiations before a contract is entered into might be brought into question if, by way of purely hypothetical example, he acted out of personal spite or because he had been bribed. As a result, the potential counterparty is not exposed to what, if they were negotiating with another private party, might be the pure capriciousness of that private party in deciding whether to enter into the contract and on what terms.

65. However, when conducting negotiations, the Minister is entitled to have regard to a wide range of considerations, including political considerations, which would not typically play a role in negotiations between two private commercial parties . In the present case, for example, entering into the Implementation Agreement would involve a commitment potentially requiring substantial payments of public money. There is inevitably a possible political dimension to such questions which it would be legitimate to take into account. In the present case it appears that the incoming government after the general election in December 2014 may have been less convinced than the former government that the project was a good idea and that the commitment to be given in the Implementation Agreement was justified.

66. For these reasons, in the present context the Board takes the opportunity to reaffirm the guidance given by it in the Mercury Energy case, at [1994] 1 WLR 521 , 529A-B: “It does not seem likely that a decision by a state enterprise to enter into or determine a commercial contract to supply goods or services will ever be the subject of judicial review in the absence of fraud, corruption or bad faith.” The limited scope for a judicial review challenge as indicated in this passage reflects the width of the relevant discretion enjoyed by a state enterprise (or, in the present case, the Minister of Energy) when exercising its powers to negotiate a commercial contract or how to use its rights under such a contract .” (Emphasis added)

65. It is clear from this that the contractual context need not be purely commercial for the limited scope of judicial review to apply, as political and other considerations may be at play and rightly taken into account by the authority. In Hampshire County Council v Supportways Community Services Ltd [2006] EWCA Civ 1035 , the council had entered into a service agreement with Supportways for the provision of housing related support services pursuant to a scheme established by the . The council exercised a contractual right to review the services and concluded that the cost was too high and that the agreement should be determined. Rejecting Supportways’ claim for judicial review and an order quashing the result of the review, Neuberger LJ (as he then was) said as follows: Local Government Act 2000 “35 In my judgment, the basis of the Company's case was not in public law, but only in private law. The Company's complaint was that the Council had failed to comply with the Agreement , and the Company accordingly was seeking to enforce the Council's compliance. Subject to being contradicted by a closer analysis of the principles or by binding authority, such a complaint and such enforcement would appear to me respectively to involve a private law claim and a private law remedy, both of which are contractually based, albeit with common law and equitable aspects. 36 In answer to this, Mr Knafler first relied on the fact that the Council's obligations under clause 11.3 were, in reality, public law duties in that they can be traced directly to section 93 and to paragraph 71 of the 2003 Guidance. The fact that a contractual obligation is framed by reference to a statutory duty does not, in my view, render that obligation a public law duty. Of course, where the statutory duty is owed to a contracting party independently of the contractual obligation, he can normally expect to be able to seek a public law remedy by reference to the duty, as well as, or instead of, a private law remedy by reference to the obligation. However, in the present case, the Council's public law duty, namely that arising under section 93, was owed to the Secretary of State in relation to the provision of grants. There was, as it seems to me, no question of that duty being owed to providers such as the Company. 37 Mr Knafler next relied on the fact that the nature of the Agreement, involving as it did the Council performing public administrative functions, was such that a claim brought under it would be a public law claim. That cannot, I think, be right. Virtually any contract entered into by a local authority, almost by definition, will involve it acting in such a way, as otherwise it would be acting ultra vires. Yet, it is clear that, as Mr Knafler rightly accepts, in the case of alleged breaches of many such contracts, a private law claim is the only type of claim which can be brought. 38 Thus, the mere fact that the party alleged to be in breach of contract is a public body plainly cannot, on its own, transform what would otherwise be a private law claim into a public law claim. There are, of course, circumstances where, in a contractual context, a public body is susceptible to public law remedies. However, where the claim is fundamentally contractual in nature, and involves no allegation of fraud or improper motive or the like against the public body, it would, at least in the absence of very unusual circumstances, be right, as a matter of principle, to limit a claimant to private law remedies .” (Emphasis added)

66. In the same judgment, at [55] to [56], Mummery LJ held that: “55…a public authority could, in principle, both be subject to claims in private law for breach of contract and to judicial review for breach of public law duties or abuse of public law powers in connection with a contract made by it.

56. [However], in order to attract public law remedies, it would be necessary for the applicant for judicial review to establish, at the very least, a relevant and sufficient nexus between the aspect of the contractual situation of which complaint is made and an alleged unlawful exercise of relevant public law powers .” (Emphasis added)

67. What the Hampshire CC case makes clear is that the mere fact that a contracting party is a public body or that the contractual obligation in question is “ framed by reference to a statutory duty ” is not sufficient to render that obligation a public law duty. More would be required in the form of “ at the very least, a relevant and sufficient nexus ” between the contractual obligation in question and a relevant public law power. I was also referred to the judgments of Holgate J (as he then was) in R (Annington Property Ltd) v Secretary of State for Defence [2024] 1 WLR 365 at [465] and the Court of Appeal in R (Dudley Muslim Association) v Dudley MBC [2015] EWCA Civ 1123 at [22] to [26], both of which make similar points.

68. In the present case, the impugned decisions are ones that were taken pursuant to the terms of the Contract and the SRTs. The context is therefore contractual. Moreover, the SRTs (including the terms in question) were ones that were agreed after a process of negotiation between the SoS and the construction industry (or at least those members of that industry who chose to take part). The fact that the SoS’s underlying objectives in that negotiation went beyond the purely commercial and included the desire to achieve an appropriately funded and effective scheme of self-remediation in respect of necessary works in the interests of public safety does not of itself diminish or render insignificant that contractual context. As held in the Mauritius case, such objectives are part and parcel of what a public authority may take into account in conducting such negotiations both as to the terms of a contract and as to how those will be applied.

69. Mr Litton’s submission as to the statutory architecture behind the Scheme does not, in my view, advance his argument as to the scope of judicial review very far. The existence of that architecture or statutory context is very far from determinative of the question whether the full range of judicial review grounds is available even taking account of the fact that the Contract is specifically referenced in reg. 21 of the RAS Regulations. That reference does no more than confirm the statutory background to the terms; it does not render public the contractual obligations arising out of those terms.

70. It is significant in this case that none of the impugned decisions are said to have been made in the exercise of any statutory or prerogative power, the implication being that it is accepted that these were made in the exercise of contractual powers. What then are the factors, apart from the statutory context, which the Claimant says points to the full range of public law standards being applicable to the exercise of such powers? The Claimant relies on three factors: the first is that the Contract plays a key part of the regulatory mechanism to achieve the statutory purposes of the BSA 2022. However, in the absence of the terms being dictated by statute (which they are not) it is difficult to see how the exercise of a broad statutory power to establish the Scheme can be said to impose public law obligations in respect of contractual provisions giving effect to that scheme. The enabling provisions of the BSA 2022 and the prescribed requirements under the RSA Regulations are in broad terms and do not descend to the level of stipulating what particular terms should be contained in the Contract or the SRTs. The Claimant suggests in its Skeleton Argument (at [77]) that “ The source of the Decisions is ss. 126 – 129 BSA 2022 and the RAS Regs under which the Scheme was established ”. However, there is nothing in those provisions which can be said to contain any statutory power pursuant to which the impugned decisions were made. Those decisions were made pursuant to contractual provisions which are not directly reflective of any particular statutory provisions. There was therefore no “nexus” between the contractual provisions pursuant to which these decisions were made and any statutory power so as to attract public law remedies: see Hampshire CC at [57] per Mummery LJ. The position here is to be contrasted with that in R (Elliot Associates) v London Metal Exchange [2024] EWCA Civ 1168 at [79] (on which the Claimant places some reliance), as in that case, the decision was made in the exercise of a regulatory rule that had been expressly incorporated into the relevant contract by reference. That passage in Males LJ’s judgment in Elliot was obiter in any event and does not assist the Claimant.

71. The second factor relied upon by the Claimant is that Rydon was compelled to enter into the Contract and the SRTs, and the Contract cannot be said to be a ‘normal’ commercial contract freely negotiated between the parties and freely entered into by Rydon. Particular emphasis is placed on the regulatory consequences – including being placed on the Prohibitions List – of failing to sign up to these terms.

72. It is right to say that the consequences of not signing up were severe: as set out above, they include being prevented from undertaking large developments (defined as those of more than 10 homes) and being subject to building control restrictions that would restrict current and future projects. Whilst there was no compulsion as such, in that Rydon could have opted not to sign up, the commercial reality was that any affected entity not willing to substantially downscale its business activity would have to sign up. The question is whether that commercial reality changed the character of the Contract such that it is appropriate to overlay contractual obligations with those arising under public law. I am not persuaded that it does. It is not unusual for a private entity to have to enter into a contract with a particular provider (e.g. with an insurer) as a condition of participating in a given market. Moreover, the terms of the Contract in this case were not imposed ‘from on high’ but were the subject of extensive negotiations with the HBF, the representative of the building industry. That Rydon chose not to participate (in the apparent belief that as a SME provider, the negotiations were not relevant to it) does not undermine the significance of such negotiation. The industry therefore had a substantial say in the terms, which, as a matter of commercial reality, its members would have to sign up to. Of course, one cannot ignore the fact that these negotiations may have been somewhat lop-sided given the Government’s stated intent that the building industry pay a fair share towards the necessary remediation work. However, that seems to me an aspect of the public interest which the SoS was entitled to take into account and to take steps towards securing. It is notable that it is no part of the present claim that there was anything unlawful about that process of negotiation or as to any of the terms of the Contract or the SRTs that were agreed.

73. The Claimant also prays in aid the fact that the Department was unwilling to enter into any further negotiation with Rydon or a side letter. It is said that this is further evidence of the absence of free negotiations. However, Rydon had the opportunity at an earlier stage to participate in the negotiations. It chose not to take that opportunity up. It cannot now complain, after the terms have been agreed with the bulk of the industry, that the Department was unwilling to reopen negotiations especially on its account.

74. The final factor relied upon is that the SoS, in exercising his discretion, was not operating in any sort of commercial market. This point is not understood. The context was no less commercial than that of many contracts between a government department and a private entity, save that in this case the Government, not being the owner of any of the affected buildings, was not a direct beneficiary of the agreed services. However, that does not detract from the fact that there is a contract the terms of which were agreed after a process of negotiation.

75. For these reasons, the Claimant’s arguments as to the scope of judicial review in this contractual context do not succeed. Decisions made pursuant to the Contract and the SRTs are amenable to judicial review only on the limited grounds of fraud, corruption or bad faith, none of which is alleged or is extant here. The Claimant has available alternative contractual remedies but complains that such remedies would not provide the relief sought by way of judicial review. However, even if that were so, that is not reason enough to permit public law remedies to be pursued. As held by Mummery LJ in the Hampshire CC case at [61]: “…it cannot be right in principle for a party to a contract with a public authority to have recourse to public law remedies simply on the ground the private law remedies, such as specific performance, are not available after the relevant contractual obligations have expired, or because they are too vague and uncertain to be specifically enforceable by the court, or because alternative private law remedies, such as damages for breach of contract, are inadequate. The relevant remedies are those available in private law for breach of contract.”

76. That is sufficient to dispose of the claim for judicial review in its entirety. In the event that I am wrong about the scope of judicial review, and for completeness, I go on to consider each of the grounds of judicial review on their merits. In doing so, I bear in mind the need to consider each such ground in the particular contractual context in which it arises. As stated in the Mauritius case (at [63]), the Court should be astute not to allow the application of public law standards to cut across or undermine the SoS’s contractual position and confer on the contracting counterparty some advantage which goes beyond that which was agreed. Ground 1 – Breach of Natural Justice Ground 1 - Submissions

77. This ground is based on the failure by the SoS to give Rydon an opportunity to respond to evidence submitted by the Interested Parties and the Deputy Mayor of London as to their reservations about appointing Rydon to do the remediation works. Mr Litton submits that in the context of this case, the SoS should at the very least have provided Rydon with the “ gist of the case which [it] has to answer ”: see R v SSHD ex parte Doody [1994] 1 AC 531 at 560D to G. Mr Litton also referred me to: i) R (Miller) v Health Service Commissioner for England [2018] EWCA Civ 144 at [43]: “The use of the phrase “gist of the allegations” should not be seen to obscure a fundamental right accorded to the person affected by the common law rules of natural justice, namely “to have afforded to him a reasonable opportunity of learning what is alleged against him and of putting forward his own case in answer to it””; ii) R (Anglian Water Services Limited) v Environment Agency [2004] EWHC 1506 (Admin) at [26]: “Anglian submits that there was a breach of the rules of natural justice in that copies of the letters from Mr Drinkwater and Mr Thomas dated June 17 and July 3, were not sent to Anglian so as to enable them to respond to their contents before the decision was made. The Agency acknowledge that it should have done so and expresses regret at the omission; but submits that it was a lapse that did not have adverse consequences so far as Anglian was concerned as the letters did not contain any new information. I do not agree. The letters set out detailed reasons why the residents considered that a private treatment plant was impracticable, evidence that had not been advanced before the first determination. Anglian should have been given the opportunity to comment on their contents. In my judgment the failure to give Anglian the opportunity to do so was a procedural flaw that rendered the decision-making process unfair.”; iii) Kanda v Government of Malaya [1962] AC 332 at 337 (Inspector of Police dismissed “ without being given a reasonable opportunity of being heard ”); iv) R v Secretary of State for the Home Department ex p Sittampalam Thirukumar [1989] Imm AR at 414 (Asylum seeker unlawfully denied opportunity to see previous answers and reasons for Home Office’s decision).

78. Mr Litton submits that the Deputy Mayor and the RMCs had referred to certain matters, such as a water leak incident in 2010 and the lack of trust in Rydon, which it had no opportunity to answer, and which were taken into account in reaching decisions with very significant financial consequences for Rydon. It is said that this amounts to a breach of natural justice vitiating the decisions.

79. Sir James submits that none of the authorities relied upon by the Claimant established a general right to the provision of information. The contractual context here is important: there is no contractual right to such information and such a right could not be contractually implied. In any event, Rydon did have the opportunity to make whatever representations it wished, and it ought to have been obvious to Rydon that there were deep concerns on the part of RMCs (and others) as to its fitness (within the meaning of the Contract and the SRTs) to carry out the remediation work. Ground 1 – Discussion

80. The general principles as to fairness in the administrative context were summarised by Lord Mustill in Doody at p560D-G as follows: “What does fairness require in the present case? My Lords, I think it unnecessary to refer by name or to quote from, any of the often-cited authorities in which the courts have explained what is essentially an intuitive judgment. They are far too well known. From them, I derive that (1) where an Act of Parliament confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances. (2) The standards of fairness are not immutable. They may change with the passage of time, both in the general and in their application to decisions of a particular type. (3) The principles of fairness are not to be applied by rote identically in every situation. What fairness demands is dependent on the context of the decision, and this is to be taken into account in all its aspects. (4) An essential feature of the context is the statute which creates the discretion, as regards both its language and the shape of the legal and administrative system within which the decision is taken. (5 ) Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result; or after it is taken, with a view to procuring its modification; or both. (6) Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interest’s fairness will very often require that he is informed of the gist of the case which he has to answer.” (Emphasis added)

81. The present case is concerned not with a statutory discretion but a contractual one, and it is clear that there is no universal right to the provision of information prior to a relevant decision being made. The requirements of fairness may in a particular context be satisfied by simply providing the affected party with the decision and an opportunity to challenge it thereafter: see e.g. R (FB(Afghanistan)) v SSHD [2020] QB 185 at [81]. Not only is the context here contractual, but it is also far removed from cases such as Kanda , Miller or Sittampalam which concern disciplinary or adjudicative measures or the fundamental rights of asylum seekers. Whilst the Anglian Water case (also cited by the Claimant) did hold that third party representations ought to have been made available to the company before a decision was made, that was in the context of an obligation under s.101A of the which imposed on sewerage undertakers a duty to provide a public sewer in a particular locality if certain detailed statutory conditions are satisfied and where an earlier determination had been reached without reference to such representations. That case is not authority for any general proposition that there is a right to be informed of third-party representations in all cases (and Mr Litton did not suggest it was). Water Industry Act 1991

82. The Contract and the SRTs do not provide for any information to be made available, or for a developer to make any representations, prior to the relevant decisions being made. In fact, no procedural requirements are stipulated at all, and it has not been suggested that that is in itself unlawful. This contrasts with other parts of the SRTs where there is such a right, e.g. under Clause 13.18, PDs may query any amount required to be reimbursed on specified grounds. It would be contrary to that contractual scheme if public law rights were to cut across it so as to create rights for Rydon that are not otherwise catered for: see Mauritius at [63]. In any case, Rydon has available to it contractual remedies that could be pursued by way of Part 7 proceedings. These could include for example, if Rydon were so minded, a claim that the SoS did not act “reasonably” in reaching the Designation Decision as he was contractually obliged by the definition of “Designated Participant Developer” within Annex 1.

83. It is also relevant to note in considering the overall fairness of the process followed that, notwithstanding the absence of any contractual right to make representations, Rydon was afforded the opportunity to do just that. Rydon complains that it could not respond specifically to certain matters raised by third parties including as to the lack of trust. However, given the history of the matter, including the evidence and submissions of the Department during Phase 1 of the Inquiry, the sorts of issues raised by the Deputy Mayor and the RMCs ought to have been obvious. The Deputy Mayor, for instance, highlights Rydon’s exclusion from the Help to Buy Scheme - an exclusion that Rydon did not consider commercially worthwhile challenging at the time - and that “ until the Grenfell Tower Inquiry publishes its findings and recommendations, serious concerns remain around the integrity and competence of this developer ”. Similar concerns were expressed by the RMCs albeit by reference to certain dealings with Rydon both before and since the need for remediation arose. This included Rydon’s failure to respond substantively to a letter from KDG dated 18 January 2021 enclosing a fire safety report and seeking confirmation from Rydon as to the financial support it would be offering given its role as the developer of the Cable Street Buildings responsible for the defects noted in that report. Realistically, it cannot have gone unnoticed by Rydon that there were such concerns, even without being shown the September 2023 letters, and it could have sought to address them in general terms in its representations, although it is difficult to discern what could have been meaningfully said other than to express disagreement with them. It is also relevant to note that the Department, in testing some of Rydon’s claims, asked Rydon about the failure to respond to the 18 January 2021 letter mentioned by the RMCs, thereby expressly affording Rydon the opportunity to address that issue.

84. For these reasons, there was, in my judgment, no breach of natural justice. Ground 1 therefore fails and is dismissed. Ground 2 – Breach of Tameside duty Pleading issue

85. The first issue under this ground is whether it has been properly pleaded. Paragraph [87] of the Re-Amended Statement of Facts and Grounds (“ RASFG ”) provides that “ The Secretary of State failed in his Tameside duty to investigate adequately or at all whether Rydon is a fit person to carry out or procure the remediation works to the Buildings ”. The Detailed Grounds of Defence (“ DGD ”) complain that this amounts to a bare assertion without adequate particularisation as to what Rydon says the duty requires in this context. The Claimant’s Reply did not elaborate, but the Claimant’s Skeleton Argument does so by explaining that the SoS ought to have asked Rydon to provide documentary evidence as to lessons learned as suggested by officials in Annex C to the First Submission.

86. The question is whether the pleaded Tameside ground is deficient and if it is, whether the Claimant is entitled to make good that deficiency through its Skeleton Argument.

87. Mr Litton submits that the Tameside ground was always part of the pleaded case and that the Skeleton Argument has merely provided further elaboration. Sir James submits that that will not do and cites the cases of R (Talpada) v Secretary of State for the Home Department [2018] EWCA Civ 841 at [67] to [69] (cited in Keep Bourne End Green v Buckinghamshire District Council [2020] EWHC 1984 (Admin) at [38]) in which Singh LJ emphasised the need for “ procedural rigour ” in public law litigation and deprecated the practice of grounds of challenge “… “evolving” during the course of proceedings, for example when a final skeleton argument comes to be drafted ”; and R (AB) v Chief Constable of Hampshire Constabulary & Ors [2019] EWHC 3461 (Admin) at [113] (skeleton argument not to be used as a means of amending grounds relied upon).

88. In my judgment, whilst Ground 2 (originally Ground 1D) of the RASFG is somewhat lacking in detail, it contains sufficient information for the Defendant to understand the case against it. The Defendant would understand from the brief pleaded passage that there was an alleged failure to investigate the question of Rydon’s fitness to undertake the remediation works. The precise manner in which that failure arose is not specified, but the RASFG taken as a whole does set out at least part of the factual basis for the allegation in that there is reference to officials highlighting the fact that Rydon may be able to produce documentary evidence to demonstrate that it has changed: see RASFG at [37]. I bear in mind that the claim more generally has been pleaded in considerable detail across almost 40 pages; this is not therefore a case where a Claimant has given the barest possible detail of its case only to start elaborating on the claims at the stage of skeleton arguments.

89. I proceed therefore on the basis that the issue has, in the context of this otherwise very detailed claim, been adequately (albeit not fully) pleaded.

90. I turn then to the substance of Ground 2. Ground 2 - Submissions

91. Mr Litton submits that it was irrational not to investigate whether Rydon was fit to undertake the works, and, in particular, not to inquire as to evidence that might have demonstrated that Rydon had changed since the time of the initial refurbishment of Grenfell Tower. Essentially, submits Mr Litton, the Defendant’s approach has led to a situation whereby the “sins of Rydon Maintenance” are being visited on other Rydon group companies despite those having a positive track record of remediation in respect of other buildings.

92. Sir James submits that the test is one of rationality, and that, in this contractual context, there was no obligation to investigate unless not doing so would amount to not acting reasonably, in which case the Claimant would have a contractual remedy in any event. Furthermore, given the statutory approach to group companies in this context and Rydon’s corporate structure, it was not unreasonable not to dissociate Rydon from Rydon Maintenance entirely, and to consider the question of fitness accordingly. Ground 2 - Discussion

93. The relevant principles were helpfully summarised in R (Balajigari) v SSHD [2019] 1 WLR 4647 at [70]: “70 The general principles on the Tameside duty were summarised by Haddon-Cave J in R (Plantagenet Alliance Ltd) v Secretary of State for Justice [2015] 3All ER 261, paras 99—100. In that passage, having referred to the speech of Lord Diplock in Tameside , Haddon-Cave J summarised the relevant principles which are to be derived from authorities since Tameside itself as follows. First, the obligation on the decision-maker is only to take such steps to inform himself as are reasonable. Secondly, subject to a Wednesbury challenge ( Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1948] 1 KB 223 ), it is for the public body and not the court to decide upon the manner and intensity of inquiry to be undertaken: see R (Khatun) v Newham London Borough Council [2005] QB 37 , para 35 (Laws LJ). Thirdly, the court should not intervene merely because it considers that further inquiries would have been sensible or desirable. It should intervene only if no reasonable authority could have been satisfied on the basis of the inquiries made that it possessed the information necessary for its decision. Fourthly, the court should establish what material was before the authority and should only strike down a decision not to make further inquiries if no reasonable authority possessed of that material could suppose that the inquiries they had made were sufficient. Fifthly, the principle that the decision-maker must call his own attention to considerations relevant to his decision, a duty which in practice may require him to consult outside bodies with a particular knowledge or involvement in the case, does not spring from a duty of procedural fairness to the applicant but rather from the Secretary of State’s duty so to inform himself as to arrive at a rational conclusion. Sixthly, the wider the discretion conferred on the Secretary of State, the more important it must be that he has all the relevant material to enable him properly to exercise it.”

94. Applying those principles to the present context, it seems to me to be quite clear that there was no failure to undertake sufficient inquiry.

95. Whilst the SoS could have made further inquiries as alleged, he was under no obligation, statutory or contractual, to do so. It is difficult in those circumstances to gain traction with an argument that no reasonable SoS could have proceeded without making such inquiry.

96. The particular area which the Claimant says ought to have been further investigated is whether Rydon had “learned lessons” and changed its practices etc. The first point of note in that regard is that although the Rydon group companies are separate corporate entities, the approach of the RAS Regulations is not to dissociate one group entity from another for the purposes of determining responsibility for the development or refurbishment of a particular building: see e.g., regs. 7(2), 13(3) and 14(2)(b) of the RAS Regulations and the definition of Designated PD in Annex 1 to the SRTs. In the case of Rydon in particular, the evidence of its Group Legal Director, Ms Ivanec as to how the various group entities interrelate is instructive: “Each of the 3 main operating companies (Rydon Construction, Rydon Homes, Rydon Maintenance) has its own operational and management teams, its own board of directors and a managing director. Each company holds its own board meetings. The managing directors of each operating company are also members of the more senior boards of the Rydon Group. Reporting between companies in the Rydon Group occurs via monthly meetings of the Rydon Group Board .” (Emphasis added)

97. That evidence suggests that the group companies operated and continue to operate in an integrated way. Furthermore, the concerns raised during Phase 2 of the Inquiry were not confined to one or two rogue individuals within Rydon but appeared to be more systemic in nature. The potential existence of systemic flaws within an integrated group structure means that it is not necessarily unreasonable not to dissociate Rydon in 2023 from Rydon Maintenance in 2014-17 for the purposes of the Designation Decision. In any event, the Minister was made aware of the fact that designation would be in respect of a different corporate entity. As set out in Annex C to the First Submission: “It was Rydon Maintenance - rather than Rydon Group - that carried out the refurbishment of Grenfell Tower. We note however that when banning Rydon Housing from Help to Buy, the Department has considered that the two entities were sufficiently closely related that it was reasonable to attribute failings by Rydon Maintenance to Rydon Group.”

98. The Help to Buy decision, which also conflated the two group entities, was not challenged by Rydon. It is very difficult, if not impossible, to sustain an irrationality argument against the SoS, when the group companies themselves have effectively allowed a similar failure to dissociate to go unchallenged.

99. In terms of whether Rydon can be said to have changed, there was no obligation to inquire further as to that either. The question under consideration was whether to designate Rydon by reason of it being “unfit” to carry out remediation works. The concept of “unfitness” is not confined to competence alone. It can include other matters relevant to the public interest including, for example, trust and confidence in that PD in relation, in particular, to matters relating to building safety, which may not be a matter that is easily re-established once lost. Such matters could, in this context, legitimately be viewed on a group basis and there is no irrationality in not seeking documentary evidence from Rydon as to possible changes. It was open to the SoS to proceed with what he had. For the same reasons, the fact that Rydon was successfully remediating other buildings is not decisive. The decision was multi-faceted and involved a lot more than mere competence in remediation.

100. The SoS could have obtained more information, but the fact that he did not do so does not render his decision to proceed without it irrational: see third principle in Balajigari .

101. The Claimant seeks to draw a comparison with the SoS’s approach to the way in which the RMCs were treated. The comparison is, in my view, wholly inapt. The RMCs were not potentially subject to designation and were in an entirely different position. What information was sought from the RMCs provides no guidance as to whether the SoS acted irrationally with regard to Rydon.

102. It is my view, for the reasons set out, that the SoS did not act irrationally in terms of the scope of inquiry and there was no breach of the Tameside duty. Ground 2 therefore fails and is dismissed. Ground 3 – Failure to take account of Material Considerations Ground 3 - Submissions

103. Mr Litton’s submission under this ground is that there were certain matters that were so obviously material to the decisions that it was irrational to leave them out of account. The matters left out of account (which overlap to some extent with those said to have been inadequately investigated under Ground 2) are said to include the fact that Rydon was not Rydon Maintenance, that Rydon had successfully remediated numerous buildings, that the evidence as to Rydon Maintenance given to the inquiry was outdated and in respect of a different company, and that the view of Senior Civil Servants that the Cable Street Buildings “ should be transferred ” (as set out in the Dossier) was not included in the Ministerial Submissions.

104. Sir James submits that the first three of these matters were not left out of account and that in respect of the fourth, there was nothing irrational about presenting a balanced summary of the evidence in the Ministerial Submission and leaving the decision to the SoS. Ground 3 - Discussion

105. In the absence of any express or implied statutory prescription of matters to be taken into account (as is the case here) the question is whether there are some matters that are “ so obviously material to a decision … that anything short of direct consideration of them by [the public authority] … would not be in accordance with ”: per Cooke J in the Act CREEDNZ Inc v Governor General [1981] NZLR 172, 183 (cited in R (Friends of the Earth Ltd) v Secretary of State for Transport [2021] PTSR 190 at [117]). It was confirmed in Friends of the Earth (at [119]) that “ the test whether a consideration is “so obviously material” that it must be taken into account is the familiar Wednesbury irrationality test … ”.

106. Applying that test to the matters relied upon by the Claimant, it is plain, in my judgment, that to the extent that any of them were not considered by the SoS, it was not irrational to take that approach.

107. The first matter relied upon, namely that the remediation works would be undertaken by a company other than Rydon Maintenance, was taken into account: that fact is expressly mentioned at [3(g)] of Annex C to the First Submission. The same applies to the second matter, namely the fact that Rydon had remediated or was in the process of remediating other buildings: see [16] to [19] of the First Submission, where the SoS is provided with details as to the precise number of buildings for which Rydon had responsibility and as to the stage remediation had reached for them. There was, however, a difficulty as at the date of the First Submission in assessing whether such remediation works met the required standard, as the relevant information in that regard was not provided to the Department until 30 May 2024.

108. Mr Litton’s point appears to be not so much that these matters were not included in the First Submission (since they clearly were), but more that Rydon’s successful remediation of other buildings could not possibly have been taken into account because if it had been then the SoS could not rationally have considered Rydon unfit. This was a recurring theme in Mr Litton’s submissions under various of the Grounds. In my judgment, the point lacks merit for the simple reason that it is based on a very narrow reading of “unfitness” within the meaning of the SRTs. Clearly, the fact that Rydon had successfully remediated other buildings was a relevant consideration, but it was far from the only one and might arguably even be said not to be the principal one for the purposes of the Designation Decision. The question was whether Rydon (or any of its group companies) “ is currently a person whose conduct is under consideration by a public inquiry regarding their performance or behaviour in connection with building safety matters such that the PD is reasonably considered by DLUHC to be unfit to carry out or procure … ” the remediation works. The question of ‘unfitness’ here clearly connotes factors over and above competence and could include things such as trust and confidence in Rydon, the wider public interest or other matters relating to conduct arising in the course of the Inquiry. Rydon may well have successfully remediated other buildings but that would not necessarily mean that, in light of the evidence presented to the Inquiry (which could, for example, have had the effect of badly eroding trust and confidence), it would be considered ‘fit’ to remediate the Cable Street Buildings having regard to all relevant considerations.

109. There is no contradiction in designating Rydon in respect of some buildings and not others. That is consistent with fitness not being a binary matter based on competence alone and is an outcome contemplated by Clause 7.7 of the SRTs: (“… either in relation to all relevant Buildings Requiring Work or such Buildings Requiring Work as it may determine …”). There may be a host of reasons – including timing, locality and local sensitivities or the history associated with particular buildings – why it might be appropriate to designate only in respect of specific buildings.

110. The final matter relied upon under Ground 3 is what Mr Litton described as a “ very significant disconnect ” between the views of two senior civil servants as set out in the Dossier and the information which was included in the First Submission. The point, in short, is that their view that the “ buildings should be transferred ” and that they had “ no specific concerns about Rydon taking over the buildings ” ought to have been made known to the SoS by way of inclusion in the First Submission.

111. Whilst senior civil servants might in some cases make a recommendation to the relevant Minister (as was the case here in respect of some of the matters to be decided) or express a view for the Minister to consider, they will not invariably do so. There will be circumstances where it will be considered appropriate merely to set out the evidence and the options and leave the decision to the Minister. It cannot be said that the views of senior civil servants, who do not have the responsibility for making the decision, were so obviously material that it would be irrational to leave them out of account. These were not for example the views of expert witnesses on a technical or specialist matter on which the SoS would need assistance; they were views on an issue that would require the SoS to make a value judgment in due course. The Claimant does not suggest that the evidence presented to the SoS in the First Submission is otherwise biased or unfairly summarised. As such, it can be said the SoS had all the information required to make the relevant decisions and nothing obviously material was left out of account. The SoS could have sought the views of the senior civil servants in making his decision, but whether or not he did so was a matter that fell within the “ margin of appreciation within which [he] may decide just what considerations should play a part in his reasoning process ”: Friends of the Earth at [116] citing from R v Somerset County Council, Ex p Fewings [1995] 1 WLR 1037 , at 1049.

112. Accordingly, Ground 3 fails and is dismissed. Grounds 4 & 5 – Predetermination / Improper Motive

113. The Claimant contends that the evidence points to the decisions having been predetermined and/or made with the improper motive of punishing Rydon or making an example of it. Once again, there is a considerable overlap between the points relied upon in support of these grounds and those in support of the grounds considered above.

114. The relevant test to be applied here is “… whether a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the [decision-making] was biased by predetermination ”: see Miller at [57]. In my judgment, there is no evidence in support of the claims of predetermination or improper motive. Dealing first with the allegation of predetermination and each of the matters set out at [94] of the Claimant’s Skeleton Argument, my views are as follows: i) It is said that the only factor in favour of the designation is the “ concerns about the oral evidence given by some Rydon employees and former employees ” to the Inquiry. This appears to be based on a somewhat incomplete reading of Annex C to the First Submission from where this quote is taken. On a fair reading of [3] of Annex C, it is clear that several of the sub-paragraphs [3(a) to (h)] either did or could relate to Rydon specifically and which may be relevant to a decision to designate. There is reference, at [3(a)] for example, to the findings of the Phase 1 Report which suggested that the Inquiry did not agree with parts of Rydon’s testimony. Furthermore, the concerns about the oral evidence were developed at [3(c)] by citing the evidence that “ Rydon relied entirely on others to secure compliance and lacked the expertise to spot potential non-compliance ”. Whilst other criticisms were not directed at Rydon alone, they bolstered the overall picture of concern about Rydon. ii) It is said that the Department did not raise these concerns with Rydon. This must be a reference to them not being specifically raised in the process leading to the Designation Decision (and the related decisions), since it is clear that these concerns were raised in the context of the Inquiry in the course of submissions. Indeed, [3(c)] of Annex C identifies the specific passages of the Department’s closing submissions for Phase 2 of the Inquiry where these concerns were set out. There can be no reasonable complaint that these concerns were not identified again in the course of the Designation Decision, given the absence of any statutory or contractual requirement to do so and given that Rydon could not reasonably claim not to be aware that these concerns existed. iii) The third point is that the official’s view that there was insufficient evidence to reject the Transfer Request was not included in the First Submission. I have already dealt with this “disconnect” point above. There is no substance to it. More importantly, it is difficult to discern how a decision taken by those preparing the First Submission could possibly support the contention that the SoS had predetermined the issue that he had to decide. iv) The Claimant complains that the Department continued to have dialogue with the RMCs despite not seeking the Claimant’s further views. This is also addressed above under Ground 2. It provides no assistance to the Claimant. v) It is contended that the First Submission failed to refer to the other remediation work carried out by Rydon. This contention is mistaken, for the reasons already explained under Ground 3 above.

115. The Claimant submits that these matters taken together with the fact that the SoS took a different view to that of his officials as set out in the Dossier, point to predetermination. I disagree. The fair-minded informed observer would note that there is nothing in any of the points above (whether taken individually or together) that indicate that the SoS had already made his mind up. The inference that the Claimant seeks to draw is based largely on its incredulity that it could be designated as unfit when it was actively remediating other buildings. For reasons already explained, the Claimant’s assessment of that issue is based on an unduly narrow understanding of the notion of fitness. It provides no support for the allegation of predetermination.

116. Considerable reliance is placed on the SoS’s response to an email querying whether Rydon could start remediation work on some other buildings. The response was as follows: “Thanks very much for this. SoS was clear that he is designating Rydon, period - but would choose not to issue a direction in respect of those seven buildings referenced. He has approved the attached letter, which just had minor amends. Can you confirm you're happy for me to e-sign and send, and I will do so on Monday morning.” (Emphasis added)

117. It is suggested that the words, “ SoS was clear that he is designating Rydon, period ” indicate a closed mind-approach. There might have been some extremely limited substance to this point if the SoS had used such language long before the date of the decision. However, the fair-minded and informed observer would note that the SoS’s view here was being expressed in the course of finalising the terms of the actual Decision Letter itself, the SoS having already expressed his initial decision on 4 January 2024 and could hardly support an inference that there had been predetermination before those decisions were made.

118. The Claimant’s case on improper motive is, in my view, equally lacking in substance. (There is a pleading issue which I dismiss for reasons similar to those set out in respect of the previous pleading point). That case relies to some extent on the same points as for predetermination. To the extent that it does, the same reasoning as above applies to those points, which also do not support the claim of improper motive.

119. The additional factors relied upon here are: (i) the SoS’s decision that the Cable Street Buildings be remediated to the CAN standard as opposed to the less exacting PAS 9980 standard, which entailed adverse financial consequences for Rydon, amounting in effect to a “fine”; (ii) the SoS’s decision was contrary to the Ministerial “steer” that a Transfer Request should be granted by officials if the deadline for remediation was within 3 months; and (iii) there is no explanation for the SoS’s conclusion that there was a material risk of delay to the remediation works given that Rydon had already indicated that it was in a position to commence those works within 28 days of transfer.

120. As to (i), remediating to the CAN standard was a legitimate option, the costs consequences of which were fully set out in the First Submission. The Claimant does not contend otherwise. In those circumstances, it is difficult to see how a decision to take a lawful option could be evidence of the serious charge of acting with an improper motive.

121. As to (ii), the Ministerial Steer referred to was given at a considerably earlier stage in the process prior to the Designation Decision and was not directed at a particular developer. The refusal of Rydon’s Transfer Request was pursuant to the Contract and SRTs following the Designation Decision. That process does not suggest any improper motive.

122. Finally, as to (iii), it was not irrational to consider that there was some risk of delay in circumstances where, on the one hand there were GFAs ready to be signed with REs and works (on the information at that time) apparently ready to start, and on the other, there was an assurance from Rydon as to a promised start time. It is right to say that the position was not such that it could definitively be said that the former route would be substantially quicker. However, it was a question of judgment at that stage which cannot be impugned as being irrational or indicative of some ulterior or improper motive.

123. For these reasons, Grounds 4 & 5 fail and are dismissed. Ground 6 – Wednesbury irrationality / Failure to provide reasons.

124. Mr Litton’s oral submissions on Ground 6 focused on two matters: first, it was submitted that there was no rational explanation for considering that the “ troubling evidence ” about Rydon Maintenance meant that Rydon was unfit, particularly as the latter had already successfully remediated 15 buildings; and second, that it was irrational to rely in the Decision Letter on the counterfactual of having reached Stage D when that was not in fact the case, particularly when Rydon had given a reliable assurance that it could start remediation work within 28 days.

125. The first of these has already been considered under Grounds 1 to 5: see, in particular, [108] above. It does not establish irrationality.

126. The ‘counterfactual’ argument also fails to demonstrate irrationality. The passage of the Decision Letter relied upon by the Claimant (highlighted below) must be considered in context: “Each of these buildings suffers from life-critical fire safety defects. By default, they are classified by the SRTs as Stage C Fund Buildings, because at the time Rydon entered into the Contract as the Participant Developer for its group (15 September 2023), awards of full funding had been communicated to the Responsible Entities but the Grant Funding Agreements (“GFAs”) had not yet been signed by all parties, DLUHC not yet having provided its countersignature. Had the GFAs been countersigned by DLUHC by 15 September 2023, the buildings would have been automatically classified as Stage D Fund Buildings and the planned works programmes would have commenced on or around 30 October 2023. Stage C and D Fund Buildings are to be contrasted with Stage A and B Fund Buildings (where no award of full funding has been communicated as at the date of the Contract). Whereas the default position is that Stage A and B Fund Buildings will be transferred to the relevant Participant Developer (see generally clause 12 of the SRTs), a Stage C Fund Building may only be transferred to a Participant Developer where it requests this in writing and “DLUHC, acting reasonably, accepts such request” (clause 13.2). Stage D Fund Buildings may not be transferred to Participant Developers to carry out remediation works themselves (see clause 13.8)...” (Emphasis added)

127. It is apparent, when read as a whole, that this passage, which comes under a section of the Decision Letter headed “The buildings”, is setting out the background to the decisions and does not purport to form part of the rationale for them. Moreover, the SoS acknowledges in unambiguously clear terms that the Cable Street Buildings are presently at Stage C, the Department “ not yet having provided its countersignature ”. In referring in the next sentence to what would have transpired had the countersignature been applied by 15 September 2023, the SoS was doing no more than highlighting the advanced stage that the process had already reached within Stage C. There is, to my mind, nothing remotely irrational or unreasonable in his doing so, and it cannot reasonably be suggested that the SoS was thereby proceeding on the basis of the counterfactual rather than the position as it actually stood at the time.

128. The final substantive point under this ground concerns the SoS’s reliance upon the risk of delay to remediation as part of the justification for the Clause 7.7(B) Decision. This is said to be irrational because Rydon had indicated that it would have been in a position to commence works within 28 days, and the officers’ assessment had been that there was credible evidence that Rydon could meet the start dates.

129. The relevant passage of the Decision Letter is as follows: “In reaching this decision, DLUHC has carefully considered whether to require Rydon to fund directly the Responsible Entities to enable them to arrange the necessary remediation works (i.e. in accordance with clause 7.7(A) of the SRTs), instead of the Responsible Entities receiving the funding approved by the BSF. In this regard, DLUHC acknowledges evidence you have provided to the effect that the scope and cost of works may be reduced if the buildings are not retained within the BSF. However, DLUHC considers that there is a material risk that this course of action could lead to delays in the commencement of the works and has therefore decided to exercise its right under clause 7.7(B) to designate the three buildings as Stage D Fund Buildings instead. As noted above, the GFAs between the BSF and the Responsible Entities for the three buildings have already been prepared and the planned works programmes can therefore commence with minimum further delay.”

130. The delay to which the SoS refers is that which would arise had there been a direction pursuant to Clause 7.7(A), which would require Rydon to fund works undertaken by the REs ; whether or not Rydon was in a position to start works within 28 days was irrelevant to that direction as it would have been the REs doing the works in any event.

131. Even if that had not been the case, it would not have been irrational to take account of the risk of some delay for the reasons considered above at [122].

132. The final point arising in the Agreed List of Issues under this Ground is whether adequate reasons were given for the Designation Decision. This ground is not explained or developed in the Claimant’s Skeleton Argument and was only mentioned briefly by Mr Litton by way of Reply. I can deal with it similarly briefly by stating that I can see no basis whatsoever for the suggestion that the reasons are inadequate.

133. Accordingly, Ground 6 fails and is dismissed. Conclusion

134. The contractual context of this claim means that judicial review is limited to a claim on the grounds of fraud, corruption or bad faith, none of which applies here. Even if that is wrong, the claim fails on the merits as none of the grounds for seeking judicial review are made out for the reasons set out above.

135. The claim for judicial review is dismissed.

136. In the circumstances, it is unnecessary to go on to consider the final issue in the agreed List of Issues which is whether s.31 (2A) of the applies. Supreme Court Act 1981

137. I am grateful to all Counsel and their legal teams for the helpful and concise way in which this matter was presented. I am particularly grateful to junior Counsel on both sides for their assistance in finalising the judgment for handing down.