HB (WM) Limited & Ors v Sto Limited & Ors

INTRODUCTION

These are applications to set aside service out of the jurisdiction. There is also an application to set aside an extension of time for service of the claim form. The underlying dispute gives rise to novel issues arising under sections 130 and 149 of the Building Safety Act 2022 (“the BSA”).

There are three related sets of proceedings. They arise from the use of cladding products installed on 18 different high-rise buildings. The overall value of the three claims is put at about £90 million. The Claimants are all developers. After the Grenfell Tower fire, the Claimants carried out inspections of certain developments and they established the existence of allegedly defective cladding which is said to give rise to fire risks. The Claimants have carried out or are carrying out remedial works to those buildings. The works are funded in the first instance via the government’s Building Safety Fund, but the Claimants say that they are liable to fund the remedial works. These claims are brought to recover the costs of those remedial works from parties who are alleged to be responsible for the defective cladding. The three Defendants are the same in each case and they are related entities. The Second and Third Defendants are domiciled in Germany, and these applications to set aside service are brought on their behalf. The First Defendant has taken no part in these proceedings. (Where I refer to the Defendants below, I refer to the Second and Third Defendants.)

The Defendants took a very large number of points in support of their applications to set aside. The issues are of some legal and factual complexity. Regrettably the parties did not agree on the scope of the hearing, and it was necessary for me to rule on that at the outset.

THE PARTIES AND THE PROCEEDINGS

There are three sets of proceedings.

In each claim the First Defendant is Sto Limited (“Sto”) which was incorporated in Scotland and was previously known as C.C.S. (Scotseal) Limited. It is described by the Claimants as the UK designer, manufacturer, supplier, distributor, seller and/or installer of external wall insulation systems and was the manufacturer of the StoTherm Classic System described below. The Second Defendant acquired all the shares in Sto in 2004. In December 2024 the Second Defendant petitioned the Scottish Court to wind up Sto. It is in administration and this has resulted in a moratorium on proceedings against it; the proceedings are stayed.

The Second Defendant is Sto SE & Co KGaA (“Sto Germany”). It is a leading manufacturer of building coating and wall insulation systems. It does not trade in the UK but it did supply wholesale quantities of wall system components in bulk to Sto.

The Third Defendant is Stotmeister Beteiligungs GMBH (“SBG”). According to the evidence served by the Defendants, it was established in 2005 to hold the shares of the descendants of the Stotmeister families in Germany and its predecessors. It is a non-trading entity and has never manufactured, marketed or supplied any goods or carried out any other form of commercial activity. It is the majority shareholder in Sto Germany but unable to influence its management as a matter of German law. This is addressed further in section K below.

THE CLAIMS

As I have indicated, the Claimant developers seek to recover the costs of remedial works from the Defendants. In each case, the claim is advanced as a claim under the Civil Liability (Contribution) Act 1978 (“the Contribution Act”), but the precise formulation of the claims is one of some complexity. This may be demonstrated by reference to the pleading in the Redrow case which pleads the claims as follows:

Having regard to the present applications and the challenges brought by the Defendants, the salient aspects of these claims are therefore as follows:

The claims for contribution are in respect of the costs of the remedial works, and the underlying liability is said to be to legal or equitable owners of the building. It may be seen, and it is important to note, that the claims for contribution are put on two bases. The first is that Sto and/or Sto Germany have a liability for the same damage as the Claimants because Sto and/or Sto Germany are liable under section 149 (“the section 149 contribution claim”), and the second is that Sto Germany and/or SBG have a liability for the same damage because BLOs should be made against them (in respect of the liability of Sto) pursuant to section 130 (“the section 130 contribution claim”).

The Defendants advance two main lines of attack. These relate first to the section s149 contribution claims against Sto Germany, and secondly to the contribution claims more generally.

It is common ground that the test I have to apply to these applications is whether the relevant claim has a real as opposed to fanciful prospect of success. This means that it surmounts the CPR 24.3 summary judgment hurdle. It is also common ground that the burden is on the Claimants.

In Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7 at [71], Lord Collins commented:

“On an application for permission to serve a foreign defendant (including an additional defendant to counterclaim) out of the jurisdiction, the claimant (or counterclaimant) has to satisfy three requirements: Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438, 453-457. First, the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: e.g. Carvill America Inc v Camperdown UK Ltd [2005] 2 Lloyd’s Rep 457, para 24.”

In Vedanta Resources v Lungowe [2019] UKSC 20 at [9] Lord Briggs commented:

“Jurisdiction challenges frequently raise questions about whether the claim against one or more of the defendants raises a triable issue. As is now common ground, this broadly replicates the summary judgment test. Issues of this kind are, regardless whether contained within jurisdiction disputes, subject to a similar requirement for proportionality, the avoidance of mini-trials and the exercise of judicial restraint, in particular in complex cases …”

In Okpabi v Royal Dutch Shell Plc [2021] UKSC 3, the Supreme Court considered “the real prospect of success” test in the context of a jurisdiction challenge and there were a number of significant conclusions:

The Courts have made clear that it will not generally be appropriate to strike out a claim in an area of developing jurisprudence, since, in such areas, decisions as to novel points of law should be based on actual findings of fact – see Farah v British Airways The Times 26 January 2000 per Lord Woolf MR at [35] and Chadwick LJ at [42]-[43]. At [42] Chadwick LJ summarised the law as follows:

“As Lord Browne−Wilkinson observed in Barrett v LB Islington [1999] 3 WLR 83, unless it is possible to give a certain and affirmative answer to the question whether the claim would be bound to fail, the case is not one in which it was appropriate to strike out the claim in advance of trial. Lord Browne−Wilkinson went on to point out that in an area of the law which was uncertain and developing, it could not normally be appropriate to strike out. He emphasised the importance of the principle that the development of the law should be on the basis of actual facts found at trial and not on the basis of hypothetical facts assumed (possibly wrongly) to be true on the hearing of the application to strike out. There are observations to the like effect in Lord Browne−Wilkinson's speech X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at pages 741 and 741; and in the judgment of Sir Thomas Bingham, MR in E (A Minor) v Dorset County Council at page 694 in the same report.”

I bear all this in mind as I approach the issues in this case. I observe that the Court has been supplied with 7,000 pages of evidence (equivalent to over 15 lever arch files), skeleton arguments for the Claimants and Defendants running to 84 and 91 pages respectively, and 120 authorities. I consider that there has been a failure by the Defendants to observe the requirements of proportionality and to focus on the threshold test of a real prospect of success. Furthermore, to a large extent these applications address sections 130 and 149 of the BSA. These are new provisions and their scope and application remain to be worked out by the Courts. To the extent that the Defendants seek decisions on these new provisions at this very preliminary stage, I proceed cautiously. I made clear to the parties at the outset of the hearing that I would not be conducting a mini-trial. I reminded them of the need for proportionality and to direct their submissions to the threshold issue, namely whether there was a real prospect of success in relation to the relevant issue or claim.

The buildings in issue were all identified following the Grenfell Tower fire as having combustible materials in their external wall systems and they have required or will require remediation to address the fire safety risks posed as a result. According to the Particulars of Claim, all the buildings have the StoTherm Classic External Wall System (“the Sto system”) forming all or part of their external walls.

It is alleged that the Sto system was designed, manufactured and supplied by Sto and Sto Germany. The Claimants’ case is that the Sto system is an external insulated render system which contains expanded polystyrene (“EPS”) insulation boards fixed behind the external render. They allege that EPS will typically soften and melt in the early stages of a fire and that once ignition of the material occurs, rapid fire spread can be observed. Owing to the relatively low softening and melting point of EPS, damage can occur to the insulation well away from the seat of the fire. I did not understand the Defendants to challenge that EPS cladding systems pose a fire risk.

The Claimants allege that, as well as the presence of combustible EPS insulation, the Sto system contained common detailing – the “Sto detailing” – which was defective because cavity barriers were bypassed by a layer of EPS insulation which rendered the cavity barriers ineffective. The Claimants further allege that there are misleading statements in the British Board of Agrément (BBA) certificates and in the technical and marketing literature which was issued in the names of both Sto and Sto Germany.

I deal with the further facts by reference to the Redrow Particulars of Claim which I take as the lead claim. It is not necessary to refer to the specific facts in the other claims since the matters in issue are common across the claims. The Redrow claim concerns a residential building known as the Hemisphere in Edgbaston, Birmingham. As described above, HB(WM) was the developer, Redrow Homes Limited was responsible for snagging remedial works to the building. Redrow Limited was a signatory to the Self-Remediation Terms Contract (the “SRT Contract”) described below.

After the Grenfell Tower fire, a fire safety and cladding assessment was carried out and an EWS1 (external wall safety) report was obtained. This recorded that cavity barriers were missing, a fire could spread rapidly through the EPS cladding and combustible materials were present in the external walls. A waking watch and concierge were recommended.

On about 5^th April 2022, Redrow Limited signed a pledge with the Department for Levelling Up and Housing and Community (now the Ministry of Housing, Communities and Local Government, “MHCLG” or “the Ministry”) committing to the principle that leaseholders should not have to pay for any costs associated with life-critical fire safety remediation work. On about 26^th August 2022, the building was accepted into the Building Safety Fund.

The precise manner in which the remediation works were funded and the way in which the money flowed is not in evidence and was not gone into in detail in the hearing. Briefly the position seems to be as follows. The leaseholders or residents’ management company entered into a Grant Funding Agreement with the Ministry. This provided that funds could be paid to the residents subject to them using “all reasonable endeavours to pursue reasonable remedies available... including... claims against... relevant contractors and manufacturers” (clause 5.4.1); and “promptly to pay back any amounts recovered from those claims” (clause 5.4.3); and “upon request to assign their rights to MHCLG to enable MHCLG to make such claims” (clause 5.4.4).

MHCLG deemed the building suitable for funding for the remediation of the Sto system. MHCLG stated in their decision that “In accordance with the terms of the pledge, the Department expects Redrow to reimburse the Department for all funds paid out under the terms of the GFA [Grant Funding Agreement] where those are not reimbursed by the applicant in accordance with the GFA.”

The Claimants say that, on 13^th March 2023, in recognition of its liabilities under the BSA and the DPA 1972, the Third Claimant, Redrow Limited entered into the SRT Contract with the Ministry pursuant to which it committed to investigate and remedy fire safety defects in the buildings which its group companies had developed between 1992 and 2022. The relevant works commenced in January 2025 and were due to be completed by December 2025. The total sum paid out from the Building Safety Fund was £27.32 million. It is alleged in the Particulars of Claim that all three Redrow Claimants are liable to reimburse MHCLG for the cost of the remedial works, but this depends upon MHCLG issuing a Reimbursement Statement, and this has not yet been issued.

Thus, whilst the detail of the GFA and SRT arrangements was not analysed at the hearing, the general thrust of the scheme is reasonably clear. The key components are as follows. Leaseholders should not have to bear the costs of remediating defective cladding. It is expected that the relevant developer should meet these costs. The Building Safety Fund is a government backed fund which provides the means whereby the works can be funded. The developer is bound via the SRT to reimburse the Ministry for sums expended via the Building Safety Fund.

By application notices issued in each of the claims on 23 December 2024, the Claimants sought permission pursuant to CPR 6.36 and 6.37 to serve the Claim Forms on Sto Germany and SBG in Germany. In each case, the application was supported by a witness statement dated 23 December 2024 from Thomas Duncan, of Ashurst Perkins Coie UK LLP (“Ashurst”), the Claimants’ solicitors. The Court granted the permission sought by Orders in each claim dated 15 January 2025. Each of the Claimants issued applications dated 15 April 2025 to extend the time for the service of the Claim Form and Particulars of Claim until 8 August 2025. Those applications were supported by a witness statement of Jonathan Gale of the same date. The Court granted the extensions sought by its Orders dated 29 April 2025.

It is common ground that all relevant documents were in fact served on Sto Germany and SBG in the Lendlease and Barratt Claims by 10 April 2025 such that the Lendlease and Barratt Claimants did not need to avail themselves of the service extensions granted by the Court. In the Redrow Claim however, whilst Sto Germany was served with the relevant documents on 11 April 2025, service was not then effected on SBG. The Redrow Parties made a further application to extend time for the service of proceedings. That application, dated 19 June 2025, was supported by a second witness statement from Thomas Duncan. The Court’s order dated 19 June 2025 extended the time for service of documents in the Redrow Claim until 18 October 2025. Service was effected on SBG on 1 August 2025. In addition to their applications seeking to set aside the orders for service out, the Redrow Defendants submit that the extension should be set aside as a result of a failure by Redrow to make full and frank disclosure to the Court when seeking extensions of time in April and June 2025 for the service of their claim on SBG and/or because there was no good reason for the extension. I address this at section L below.

Sto Germany and SBG filed acknowledgments of service in each of the claims. It was - but is no longer - disputed that these were filed within the extended period of time agreed with each of the Claimants to do so. The parties reached a further agreement that the time for each of Sto Germany and SBG to apply to contest the jurisdiction of the Court to hear the claims made against them be extended to 19 December 2025, with Sto Germany and SBG issuing its applications in this regard on that date.

In each case, I have witness statements from Lorna Emson and Christine Volohonsky on behalf of the Defendants and from Thomas Duncan on behalf of the Claimants.

The relevant provisions of the BSA which arise in connection with these applications are sections 130, 131 and 149 which provide as follows:

For the purposes of section 130, a body corporate (A) is associated with another body corporate (B) if—

one of them controls the other, or

a third body corporate controls both of them.

A body corporate (X) controls a company (Y) if X possesses or is entitled to acquire—

at least half of the issued share capital of Y,

such rights as would entitle X to exercise at least half of the votes exercisable in general meetings of Y,

such part of the issued share capital of Y as would entitle X to at least half of the amount distributed, if the whole of the income of Y were in fact distributed among the shareholders, or

such rights as would, in the event of the winding up of Y or in any other circumstances, entitle it to receive at least half of the assets of Y which would then be available for distribution among the shareholders.

A body corporate (X) controls a limited liability partnership (Y) if X—

holds a majority of the voting rights in Y,

is a member of Y and has a right to appoint or remove a majority of other members, or

is a member of Y and controls alone, or pursuant to an agreement with other members, a majority of the voting rights in Y.

A body corporate (X) controls another body corporate (Y) if X has the power, directly or indirectly, to secure that the affairs of Y are conducted in accordance with X’s wishes.

In subsection (3) a reference to “voting rights” is to the rights conferred on members in respect of their interest in a limited liability partnership to vote on those matters which are to be decided on by a vote of the members of the limited liability partnership.

In determining under any of subsections (2) to (4) whether one body corporate (X) controls another, X is treated as possessing—

any rights and powers possessed by a person as nominee for it, and

any rights and powers possessed by a body corporate which it controls (including rights and powers which such a body corporate would be taken to possess by virtue of this paragraph).

For the purposes of section 130 as it applies in relation to a building, where a person’s interest in the building is held on trust, a body corporate which is a beneficiary of the trust is to be regarded as associated with the person.

Thus, section 130 sets out the Court’s power to make a BLO in relation to a relevant liability against a body corporate which is or was associated with the original body corporate which incurred the relevant liability. The meaning of “associate” is set out in section 131. It is not suggested by the Defendants that SBG is or was not an associate of Sto and Sto Germany.

As explained above, the Claimants allege that Sto and Sto Germany would have a liability under s149 of the BSA and this is the foundation for the Claimants’ section 149 contribution claims. Two issues arise on this part of the case. First, the Defendants allege that permission was not given for service out in relation to the section 149 claim; and second, and alternatively, it is said that the section 149 claim does not have a real prospect of success.

The Defendants say that the claim under section 149 was only added later when the Particulars of Claim were served. The Defendants submit that this is a freestanding reason why service on this point should be set aside.

It was not suggested that the position varied substantively across the three sets of proceedings, and so I address this issue by reference to the Redrow case. The application to serve out comprised only the claim form and a witness statement from Mr Duncan. The claim form referred to the BSA and to all the Defendants compendiously, but there was no specific reference to section 149. However, the supporting witness statement from Mr Duncan dated 23 December 2024 made references to claims against Sto Germany as follows. He stated that Sto was liable to owners of the building under section 149. At paragraph 34 he said that “to the extent that Sto Germany or SBG were actively involved in the specification, manufacture, marketing or promotion of the system, then some or all of the claims will also be made against them.” At paragraph 44 he referred to Sto Germany and SBG and “any direct liability they may have.” At paragraph 59 he said that the claims against “the Defendants” were made under the Contribution Act on the basis that they are liable to the owners of the building for the same damage under section 149 of the BSA.

Looking at the claim form and witness statement objectively, I conclude therefore that a potential claim under section 149 of the BSA against Sto Germany was sufficiently identified and foreshadowed in Mr Duncan's witness statement, and I further conclude that permission was given to serve out in relation to such a claim.

That is not however the end of the matter because, if I am wrong on that, it was common ground that I have a discretion to permit the section 149 claim to proceed if I conclude that it stands a real prospect of success, unless the Defendants have been prejudiced. For the Defendants, Ms Parkin KC submitted that this was however subject to the Claimants issuing a formal application. I reject that submission. I can see no purpose in requiring the Claimants to issue an application for the sake of it when the issues are well understood by both parties and have been fully ventilated before the Court. I am satisfied that the Court’s case management powers and the need to further the Overriding Objective are quite sufficient to enable the Court to determine the point without the need for a formal application.

Subject to the point about a formal application, the parties were agreed that (upon the assumption that permission had not been given to serve out against Sto Germany in respect of the section 149 claim) the approach to be adopted was analogous to that which the Court would take upon an application to amend. In my judgment that is correct. In this respect Ms Parkin submitted that the claim should not be permitted to proceed because - at the time when permission was granted – the Claimants thought that limitation in the contribution claim would run from the date of the SRT contract, and so the time would now have expired. I reject this. I explain below at [92] the Claimants’ stance on the limitation period at the time. That was not the Claimants’ view of the limitation period then or now, and nor is it the Defendants’ view. Indeed, it is unsurprisingly common ground that the right to recover contribution arises when “(1) damage has been suffered by C for which D1 and D2 each liable and (2) D1 has paid or been ordered or agreed to pay compensation in respect of the damage to C.” (per Lord Leggatt JSC in BDW Trading Ltd v URS Corporation Ltd [2025] UKSC at [212]).

Ms Parkin complained that she had “no idea” what the Claimants say about when time started to run on the facts, but it is for a defendant to plead and prove a limitation defence. She did not submit that permitting the Claimants to run the section 149 point would deprive the Defendants of an arguable accrued limitation defence. Accordingly if (contrary to my primary view) permission was not granted to serve out in respect of the section 149 point, I would have exercised my discretion so as to permit the claim to proceed, subject to it being shown that it has a real prospect of success.

I turn then to consider whether the claim against Sto Germany under section 149 of the BSA stands a real prospect of success.

I set out section 149 above. It concerns “liability for past defaults relating to cladding products” and is a new statutory tort (with a 30-year retrospective limitation period). Importantly for the purposes of this jurisdictional challenge there has, to date, been no case which has considered the tests set out in section 149 and so this is a novel and untested area of law. The section provides three alternative routes to liability in sub-section (2). In the evidence of Mr Duncan and in their submissions, the Claimants focussed in particular on sub-section (b) (misleading statements). The Claimants submit that the relevant statements in this case bear a striking similarity to those made by Kingspan and which were uncovered by the Grenfell Tower Inquiry. In summary, the Claimants’ make the following points:

The Defendants have mounted a sustained attack on this. They rely upon witness statements from Ms Christine Volohonsky, a German lawyer. She makes a large number of points. These include the following: Sto Germany only supplied components of the system to Sto; Sto Germany never supplied EPS boards; Sto Germany did not manufacture and supply a cladding system directly to the UK; whilst Sto’s marketing materials may have contained information which originated from Sto Germany, Sto Germany did not sign off the materials; and the system was intended for use on external masonry walls and not steel framed buildings as was the case with the buildings in issue.

The Claimants submit that Ms Volohonsky does not deny that the statements in the BBA certificate were misleading, does not deny that the UK marketing brochures were based on Sto Germany designs, and does not explain how the BBA certificates came to make misleading claims. The Claimants also note that the Defendants have not pleaded a draft defence and so the arguments relied upon have not thus far been articulated with precision. The Claimants complain that the Defendants’ case has “evolved”.

In my judgment there is a short answer to the Defendants’ objections. Per Okpabi, the test I have to apply is whether the section 149 allegation has a real prospect of success. I am to observe judicial restraint and not to conduct a mini-trial. I should proceed on the basis that facts alleged in the Particulars of Claim are true, and I should not be drawn into an evaluation of the weight of the evidence. The points made by Ms Volohonsky and the Defendants’ submissions which I have summarised above essentially raise factual points. They are not suitable for summary determination on an application of this sort and should await trial. Indeed, given that this is a new and developing area of law, this strikes me as a paradigm case where these sorts of points should be determined at trial in light of the evidence. As matters appear to me at this stage, the Claimants’ pleaded case on these points, if accepted, would be capable of establishing a breach of duty under section 149(2)(b). I consider that the Claimants have a real prospect of success on this point.

Whilst the Claimants’ focus was on subsection 149(2)(b), the same approach is applicable to the allegations under subsections 149(2)(a) and (c). Sub-section 2(a) relates to a person which fails to comply with a cladding product requirement. In this respect, the Claimants allege that the Sto system did not comply with the Construction Products Regulations 1991 in that there was no successful test under BS8414-1 or BS8414-2 and/ or that the system should not have been specified for use in high rise blocks and/ or that it did not satisfy the essential requirements set out in Schedule 2. Once again, the Defendants take a large number of detailed points as to how the section should be construed and how a person may be deemed to fail to comply with a relevant requirement, and once again it is clear to me that these are fact sensitive issues relating to the construction of a new provision in a developing area of law, and they are not suited to summary determination. I consider that the Claimants have a real prospect of success on this point.

Sub-section 2(c) relates to a person that manufactures a cladding product that is inherently defective. By virtue of subsection 12, a “cladding product” means “a cladding system or any component of a cladding system”. The Claimants pleadthat the system is inherently defective because it contains combustible materials and would achieve a European classification of Class F and hence is unsuitable for use on tall buildings. They allege further that the Sto detailing is ineffective in preventing the spread of fire. The Defendants say that Sto Germany did not “manufacture” a cladding product; that, even if it was unsuitable for use on tall buildings, this did not make it defective; and that the system was granted European Technical Approval (“ETA”). The Claimants fairly point out that a cladding product includes a “component” (see sub-section 12), and they dispute the relevance of ETA. In my judgment, the position is the same as under sub-sections (a) and (b): these are all points for trial, and I consider that the Claimants have a real prospect of success on this issue.

Accordingly, for these reasons I am satisfied that the Claimants stand a real prospect of success in establishing that Sto Germany was in breach of duty owed under section 149.

Section 1(1) of the Contribution Act provides:

For the Defendants, Ms Powell took the Court carefully through the leading authorities on the Act including BDW and Royal Brompton Hospital NHS Trust v. Hammond [2002] 1 WLR 1397. This is not the place for a detailed examination of the caselaw, but I accept that it is of fundamental importance that when looking at a claim for contribution, the damage is clearly identified and the claimant and defendant to a contribution claim should be liable in respect of the same damage.

I have explained above at section C above how the contribution claims are formulated in this case. In their skeleton argument the Defendants advanced multiple challenges to these claims. These included that: the Claimants could not bring a claim since (per Lord Leggatt’s dictum in BDW above), they had not yet paid or been ordered or agreed to pay a specific sum; that the Claimants and Sto Germany and/or SBG would not be liable in respect of the same damage; that they would not be liable to the same person; whether the SRT terms preclude a contribution claim; and whether the loss was suffered by the Claimant parties bringing the claims. The Claimants objected that they had not been given notice of these points and they had not been foreshadowed in the extensive evidence deployed for the applications or in the pre-action correspondence. The Claimants submitted that they would wish to put in evidence, and I can see that it would be relevant to establish precisely by whom, when and how the losses were sustained, by whom the remedial works were undertaken, which party ultimately bore the costs of them, and how the GFA and SRT contract worked. Unfortunately, the parties failed to co-operate so as to ensure that the issues to be determined at the hearing were agreed, and the Defendants’ stance meant that the Claimants were taken by surprise. I was therefore required to rule as to the scope of the hearing at the outset. I acceded to the Claimants’ application, giving my reasons in a Ruling on the first morning of the hearing. The result was that the Defendants’ challenges to the contribution claims were ruled substantially out of scope. I did however allow the Defendants to argue points at a conceptual level in order to identify whether the claims were flawed in principle, and I address these points below.

In relation to the matters which I ruled to be out of scope, I would further observe that the Defendants’ arguments invited the Court to enter into a detailed factual analysis. I consider that this would be tantamount to a mini-trial and so, per Okpabi, this is a further reason why these points should not be determined in the context of an application to set aside. That said, it is open to the Defendants to renew any objections which I ruled to be out of scope in an application to strike out or for summary judgment.

The Defendants submitted that the proposed contribution claims were inadmissible because the Claimants on the one hand, and Sto Germany and SBG on the other, were not liable in respect of the same damage. I ruled that to be out of scope because it would require evidence as to what was paid, when, by whom, to whom and in respect of what the payment was made.

For the Claimants Ms Grange KC did however address the point at a conceptual level. She submitted that the Claimants were either liable to the building owners or lessees for the costs of remedial works under section 1 of the DPA (where they were the original developer) or (if they were not the original developer) they could be liable under section 124 as an associate or under section 130 of the BSA. She submitted that all the Claimants therefore had a potential liability either under the DPA or the BSA in respect of the cost of remedial works to the owners/lessees. It followed that the contribution claims against the Defendants were in respect of the same damage, i.e. the cost of remedial works. Furthermore, the liability was to the same people because Sto could be liable to the owners/ lessees in respect of the cost of remedial works via section 149, Sto Germany could be liable via section 149 and section 130, and SBG could be liable via section 130. Looked at in this way, I consider that the claims have a real prospect of success.

The Defendants argued that the Claimants could not seek BLOs so as to underpin the contribution claims in respect of liabilities owed to parties that were not before the Court (i.e. the owners and lessees). No authority was cited for this proposition and I consider it to be wrong. It is contrary to common practice in contribution claims. In such a claim of course the damage needs to be identified, but there is no need for the party that suffered the original damage to be before the Court any more than there is a need for a party in receipt of a settlement to be before the court when a party having made a settlement seeks contribution from a third party.

The Defendants also sought to raise an argument as to which of the Claimants in each claim had suffered or was liable for the loss in each case. On any view, this would require a detailed examination of the facts surrounding the agreements to remediate the defects and the SRT contracts. This was met with the objection that it was unheralded and would require evidence and so I ruled it out of scope. I would note however that Ms Grange’s submission that the SRT was essentially a “funding arrangement” and did not alter which party had suffered the damage for the purposes of the Contribution Act appeared to be well-founded.

The Defendants argued that there has been no payment or order or agreement to pay and thus (per Lord Leggatt’s dictum cited at [39] above), the Claimants cannot bring contribution claims. As to whether this was or was not the case on the facts in any specific case, I ruled that this was not within scope because it will require evidence as to what was paid, when and by whom. The Claimants did not adduce evidence on this on the basis that it did not appear to be in issue. The point will have to be worked through on the facts.

However, there is a wider conceptual issue which was argued, which is whether it is open to a party claiming contribution to issue proceedings before the cause of action has accrued. This is hypothetical on the facts as they stand since there is no evidence before the Court as to whether the cause of action has accrued in the sense identified by Lord Leggatt in BDW at [212] (See [39] above.). However, since the point was argued I will state my conclusions. In my judgment that is permissible. In BDW Lord Leggatt held:

“[216] In Kazakhstan Kagazy v Zhunus [2014] 4 WLR 86, para 65, I distinguished three questions which may be asked in relation to the accrual of a cause (or right) of action: (1) when does a right to obtain a particular remedy from a court arise; (2) when is a claimant entitled to commence proceedings claiming that remedy; and; (3) when does time to begin to run for the purpose of calculating the time limit for commencing such proceedings?

[217] In general, a claimant will not be entitled to commence proceedings claiming a remedy unless and until the right to obtain that remedy from a court has arisen; and that is also when time begins to run for the purpose of calculating the time limit for commencing such proceedings. A cause of action, in the sense of a right to obtain a remedy, arises when all the elements of the claim (i.e. the facts on which the existence of the right to obtain the remedy depends) are capable of being proved because the events which establish those facts have occurred.

…

[238] There is one more point to mention about the date when proceedings for claiming contribution can be commenced. Suppose that C chooses only to sue D1, although D2 is also arguably liable in respect of the same damage. If D1 fights C’s claim, then, on the interpretation of the law that I have just outlined, D1 has no right to recover contribution from D2 before a judgment is given against D1. It would be very inconvenient if D1 had to wait until then before it could take any proceedings against D2. It is usually more efficient and avoids the risk of inconsistent decisions, for questions of contribution to be decided in the same litigation as C’s claim against D1 (and D2 is C also sues D2). What are now CPR rr 20.6 and 20.7 create procedural machinery which make this possible. These rules enable D1, when defending a claim for compensation brought against it by C, to make a claim for contribution against a co-defendant or a third party. Such a claim may be initiated before the cause of action in the other two senses discussed above has accrued: that is, before the right to obtain an order for contribution has arisen and before the limitation period has started to run.” [underlining added]

As I observed in argument, it is a matter of routine in this Court for a defendant to claim contribution from a third party whilst denying the primary claim. Ms Grange submitted that it would be “insane” if a developer had to wait until the final sum crystallised before they could bring a claim.

Ms Powell accepted that a defendant claiming contribution against a third party or a co-defendant could bring a claim in the manner outlined by Lord Leggatt, but she submitted that it was not open to a claimant claiming contribution to bring a claim before the cause of action had accrued. I do not agree. CPR 20.6 and 20.7, which were referred to by Lord Leggatt, are rules of procedure and not substantive law. I can see no logical reason why a claimant should have to wait until it has paid or been ordered to pay the underlying sum before claiming contribution, but a defendant need not do so; indeed that may be procedurally very inconvenient. The present cases are illustrative of this point. Indeed, in the Lendlease and Barratt claims, the Claimants have freestanding claims under the DPA 1972. If the Defendants’ submission is right, then a second later set of proceedings for contribution (covering the same facts) would be required. That would be contrary to CPR 1.4(2)(i) which requires the court to deal with as many aspects of the case as it can on the same occasion and, in my judgment, it cannot be right.

I note that a similar submission was made by the Defendants in BDW in the Court of Appeal [2023] EWCA Civ 772 at [194] and rejected by Coulson LJ at [199] et seq.

In my view Lord Leggatt’s dictum at [238] should not be as narrowly construed as the Defendants submit. Indeed, the decision in BDW supports this conclusion. In that case BDW was the claimant. It had carried out remedial works voluntarily, and it appears that it had not been ordered to pay or agreed to pay anyone. The ground of appeal was framed at [17] as: “Is BDW entitled to bring a claim against URS pursuant to section 1 of the Contribution Act, notwithstanding that there has been no judgment or settlement between BDW and any third party and no third party has ever asserted any claim against BDW?” Lord Leggatt’s conclusion at [266] was that “...It is sufficient that BDW has made a payment in kind (by performing remedial works) in compensation for the damage suffered by the homeowners.” That seems to be the position (or at least the Claimants have a real prospect of establishing that this is the position) in the instant claims.

The Claimants accepted that they had come prepared to deal with one specific argument in the Defendants’ skeleton argument at paragraphs 95(2), 100(2) and 116(3). This is the same point but addressed to the three separate cases. (Paragraph 116(3) relates to a building which is no longer in issue.) These paragraphs addressed the second basis on which the Contribution Act claim was put, that is via a BLO under section 130 of the BSA:see paragraphs 111 and 112 of the Redrow Particulars of Claim extracted at section C above.

Looking at paragraph 95(2) of the Defendants’ skeleton argument (which addresses the Redrow claims) it advances two arguments: (1) that no payment, order to pay or agreement to pay has been made by or against HBWM; and (2) the liability of Sto Germany and/or SBG under a hypothetical BLO would be either (i) a liability to a person who has an interest in the dwelling for damage resulting from breach of the DPA or (ii), a liability for personal injury, damage to property or economic loss to those with a legal or equitable interest in the building, and this cannot be the same damage or liability to the same person or entity as the alleged liability on the part of HBWM under the SRT contract. As to the first point, and the question as to whether there has been any payment etc, this is a point which was in fact ruled out of scope since there is no evidence before the Court as to whether HBWM has made any relevant payments, and I consider that this is a matter which will have to be investigated on the facts.

As to the question of the same damage, and whether a liability under a BLO can amount (even conceptually) to the same damage and/or a liability to the same person, this is another example of an issue arising under new and developing law, which should be determined against actual findings of fact. The Defendants’ arguments in this respect raise issues of law which are dependent on findings of fact as to (for example) what was paid when, to whom, by whom and what any payment related to. These issues are not suitable for summary determination on an application such as this. That said, since any liability under a BLO is likely to be ultimately a liability in respect of the cost of repairs, I consider that the Claimants at least have a real (not fanciful) prospect of success on this point.

I turn now to deal with the Defendants’ extra-territoriality challenge. The issue is whether claims under the BSA have what has been described as extra-territorial effect, in other words whether the provisions of the Act can bite on Sto Germany and SBG, both of whom are domiciled in Germany. Extraterritoriality is a principle of statutory interpretation involving a presumption that statutes are intended to have effect only within territorial limits. Dicey (at [1-037]) summarises it thus:

“It has often been said that there is a presumption that Parliament does not design its statutes to operate beyond the territorial limits of the United Kingdom. Whether an English statute applies extraterritorially depends upon its construction. The presumption against extraterritorial application is more or less strong, depending on the subject matter.”

In Competition and Markets Authority (Volkswagen) [2023] EWCA Civ 1506, the Court of Appeal summarised the factors relevant when considering whether it was intended that a statute would apply extraterritorially:

“Relevant policy considerations: The following considerations might be relevant in determining intention: (i) the purpose, scheme, context and subject matter of the legislation...(ii) the practicability of enforcement.... (iii) whether the purpose of the legislation could be effectually achieved without extraterritorial effect... (iv) the legislative history of the statute as indicating whether Parliament intended that the extra territorial purpose of the legislation could be achieved by other legislative means... (v) the impact upon comity; and (vi) the nature of the law being enforced and whether it was criminal or civil. There can be overlap between these considerations on the facts of any given case...”

The Defendants have not pleaded a defence, even in draft, and so their position has not yet been articulated with precision. As originally framed, the Defendants’ argument applied to the claims advanced under both section 149 and section 130. By the time Mr Harty made his oral submissions for the Defendants the argument was not pursued insofar as it applied to the section 149 and section 130 contribution claims advanced against Sto Germany. The position at the hearing was that it was accepted by the Defendants that if (as I have found above at section I above) the Claimants have a real prospect of success against Sto Germany in relation to the section 149 contribution claim, then the Defendants did not advance an argument that either the section 149 or section 130 contribution claims were in some way barred on the basis of extra-territorial effect. The logical inference is that the Defendants therefore accept that in relation to those claims, an orthodox applicable law analysis may be undertaken. I did not understand the Defendants to suggest that the applicable law would be anything other than the law of England.

It is thus first necessary to identify and frame the residual issue that the Court must decide on this part of the case. The question is whether the Claimants can establish at this stage that they have a real (not fanciful) prospect of establishing that the section 130 contribution claim against SBG is not barred by the principle of extra-territoriality. The Claimants’ position is, in effect, that the Defendants’ arguments are misconceived and that extra-territoriality is irrelevant; rather this is a case where an orthodox applicable law analysis should be undertaken. The Claimants submit that on an applicable law analysis it is clear that the law of England is the applicable law and so extraterritoriality does not arise. In the alternative, the Claimants say that questions of extraterritoriality would be fact sensitive and so could not be determined in the context of these applications.

The factual material available to the Court relating to the involvement of SBG is sparse. The Particulars of Claim in the Redrow case plead [8.6] that SBG “is the parent company of Sto SE” and [113.1.2] that SBG “...is the ultimate parent company of Sto SE, which is the 100% shareholder of Sto Limited (the UK branch of the company). Sto SE is the producer of the Sto Therm Classic system.” It is then said [113.1.4] that “... there are good policy reasons why the Claimants should be able to recover their resulting losses from Sto Limited's ultimate parent company, which is entirely consistent with the purpose and intention of the BSA 2022.”

In support of the Defendants’ application in the Redrow case, Ms Volohonsky’s witness statement deals with SBG thus:

“43.

SBG... was established on 27th April 2005 with share capital of EUR 25,000.00. On 28 September 2006, the share capital of SBG was increased to EUR 1,000,000.00...

44.

The business purpose of SBG is (in English translation): ‘The management of the entrepreneurial assets of the Stotmeister families, in particular, through the acquisition, holding, management and sale of shares (ordinary shares and preference shares) in Sto Aktiengesellschaft... and, if applicable., the holdings in other companies and organisations.’ SBG holds 3,887,996 ordinary shares in [Sto Germany] and is the sole shareholder of Sto Management SE.

45.

SBG is a is a non-trading entity which acts as a corporate vehicle to hold the family shares of four members of the Stotmeister family.

46.

At no time since its incorporation has SBG conducted any activities of marketing, supply or manufacture of goods under the Sto brand or carried out any other form of commercial activity.

47.

It is incorrect for the claimants to allege that SBG is the ‘parent company of Sto SE’. SBG is a major shareholder of the hybrid corporate entity, which I refer to in this statement as Sto Germany, but it is not its parent company... SBG is excluded by law from the management of the affairs of Sto Germany. The management and representation of [Sto SE] is carried out by Sto Management SE, whose management board is effectively shielded from any shareholder influence.”

The Claimants do not accept the Defendants’ characterisation of the role of SBG. They complain that the Defendants have failed to provide voluntarily documents and information on the extent of SBG's connections to the jurisdiction, have blocked access to Sto’s documents, and limited themselves to responding to specific points only once raised by the Claimants. They draw attention to the fact that Ms Volohonsky does not provide the source of her information.

For the Defendants, Mr Harty submitted that section 130 could not have extra-territorial effect against SBG for the following reasons.

For the Claimants, Mr Hossain KC submitted that extra-territoriality was a red-herring. An orthodox applicable law analysis could and should be carried out. The fact that it might be difficult or that there might be more than one underlying liability did not mean that the analysis should not be attempted. The Defendants had not pleaded that a law other than English law applied.

I am satisfied that the Claimants have a real prospect of establishing that their approach is correct. The starting point is the judgment of Lord Sumption in Cox v Ergo Versicherung. At [28] he explained the basic distinction between an applicable law analysis and the question of extraterritoriality.

“It is, however, important to understand what is meant when we talk of the extra territorial application of an English statute. There are two distinct questions, which are not always distinguished in the case law. The first question is what is the proper law of the relevant liability. The answer will usually depend on the extent of any connection between the facts giving rise to liability and England or English law. If the proper law of the liability is English law, no question of extra territorial application arises. In principle, the exercise is no different from that which the court performs when it identifies the proper law of a non-statutory tort, by reference to the connection between the facts and the various alternative systems of law.This is what Lord Hodson (at p380) and Lord Wilberforce (at pp390-392) did in Boys v Chaplin [1971] AC 356, when they held that liability in respect of a road accident in Malta, in which only English parties were involved, was governed by English law. The same basic principles applied under sections 11 and 12 of the Private International Law (Miscellaneous Provisions) Act 1995 since that Act came into force. The second question is one of extraterritorial application, properly so-called. This is a question posed by section 14(3)(a)(i)(4) of the Private International law International Law (Miscellaneous Provisions) Act 1995, which had its counterpart in the common law, namely, whether the choice of law arrived at in accordance with sections 11 and 12 is displaced by some mandatory rule of the forum. This is not a choice of law principle at all, but turns on the overriding rules of policy of the forum.”

Soldiers, Sailors, Airmen and Families Association v Allegemeines Krankenhaus Viersen GmbH [2022] UKSC 29 is a later Supreme Court decision illustrating the approach taken in Cox. The statute under consideration was the Civil Liability Contribution Act 1978. The applicable law was German and accordingly the Contribution Act was not applicable. The process for selection of the applicable law was summarised at [27]:

“The identification of the appropriate law at common law involves a three stage process: (1) characterisation of the relevant issue; (2) selection of the rule of private international law, which lays down a connecting factor for that issue; and (3) identification of the system of law which is tied by that connecting factor to that issue.”

I see no reason why the same reasoning should not apply in this case. If the applicable law is English, the English statute governing the liability will apply. Dicey at [1-037] confirms the basic principle: “Where the applicable law is English law, no question of extra territorial application arises.”

In this respect it was common ground that section 149 of the BSA created a liability in tort. The Claimants submitted that choice of law would therefore fall to be determined by reference to section 9 of the of the 1995 Act and that this would lead to the result that the applicable law was English law. The Claimants also submitted (relying upon the analysis in Soldiers, Sailors) that the proper law of the contribution claim would be English law. I did not understand the Defendants to dispute this; rather, their argument was that determining the applicable law was the wrong approach.

The Defendants did not really engage with the approach set out in Cox and Soldiers, Sailors. They submitted that the Court should skip the applicable law analysis and go straight to questions of extra-territoriality. I am satisfied that (per Lord Sumption) the correct approach in this case would be to start with an applicable law analysis, and only then to ask whether there is a mandatory rule of the forum which displaces the applicable law identified by this process. It is true that the applicable law analysis may be difficult because there may be more than one underlying liability (viz. tort or contribution or – in another case – contract) but that is not a reason not to undertake the analysis. Applicable law analyses are often difficult.

As I have noted, the Defendants have not pleaded or relied upon an alternative applicable law (for example German law) or adduced any materials which would enable the Court to undertake a comparative law analysis. I see no reason not to conclude that the Claimants have a real prospect of establishing that the applicable law in this case would be the law of England.

The construction industry is international. The Grenfell Tower Inquiry established that foreign companies could be responsible for building defects identified in England. Section 130 and the “just and equitable” test is framed in wide terms. Stepping back and looking broadly at the purpose of section 130, it would be odd if it was not intended to apply to foreign entities who would otherwise fall within section 131, but that would be the consequence of the Defendants’ extra-territoriality argument.

The Defendants placed some reliance on the fact that section 130 does not in itself give rise to a liability as such, rather it is a means of making one party liable for the wrong of another. That is true, but I do not see how this leads to a conclusion that an applicable law analysis is in some way excluded, or that it supports an extra-territoriality approach. Section 130 of the BSA may perhaps be likened to vicarious liability, since it is a mechanism whereby one party can be made liable for the wrong of another for reasons of policy: see Various Claimants v. Catholic Child Welfare Society [2012] UKSC 56 at [34]:

“The policy objective underlying vicarious liability is to ensure, insofar as it is fair, just and reasonable, that liability for tortious wrong is borne by a defendant with the means to compensate the victim.”

The fact that a claim is based upon vicarious liability is not a bar to an applicable law approach. In Sophocleous v. Secretary of State for the Foreign and Commonwealth Office [2018] EWHC 19(QB), Kerr J was required to consider “where in substance the cause of action arose in so far as the right of action is founded on vicarious liability of the defendants.” The liability in question arose from assaults said to have taken place in Cyprus. He held:

“I accept Mr Chamberlain's submission that vicarious liability is not, conceptually, a tort. It is the description of a legal rule which imposes liability for someone else’s tort. I therefore do not see how the party vicariously liable, wherever located in the world, can be taken to have incurred vicarious liability other than in the place where the primary tort is committed.”

At the heart of Mr Harty’s submissions on extra-territoriality were three cases where an applicable law analysis was not undertaken, and the Court went straight to questions of extra-territoriality. In light of the conclusions I have already reached, this is not the place for an exhaustive analysis of the caselaw, but I consider that, taken together, they cannot bear the weight that the Defendants seek to impose upon them. Paramount Airways Ltd [1993] Ch 223 concerned issues under the Insolvency Act 1986. The administrators of an English company sought declarations against the Jersey registered bank that transfers to the bank were at an undervalue within the meaning of section 238 of the Insolvency Act 1986. Insolvency in the United Kingdom does not form part of the general law of civil liability. It is in that sense sui generis. As Mr Hossain pointed out, among the differences to a claim based on civil liability is that an English court dealing with an insolvency governed by the Insolvency Act is generally obliged to apply English law. There is no prior choice of law process in the usual sense of ascertaining substantial connection with a particular territory. Rather, it is simply the application of a universal rule based on where the insolvency proceedings are instituted.

The Defendants also relied on R (KBR Inc) v Director of Serious Fraud Office [2021] UKSC 2and Al-Skeini v. Secretary of State for Defence [2007] UKHL 26but these did not raise questions of civil liability so as to make choice of law a relevant step in the analysis. They were both concerned with public law rights and remedies that are not subject to determination of applicable law through the usual concepts of private international law. KBR was concerned with a criminal matter, namely the power of the Serious Fraud Office under section 2(3) of the Criminal Justice Act 1987 to require production of documents held by a foreign company. Al-Skeini was a judicial review of a refusal by the Secretary of State to conduct inquiries into deaths in Iraq and the question was whether the procedural duties under Articles 2 and 3 of the ECHR extended to events in Iraq.

For all these reasons I am satisfied that the Claimants have a real prospect of success in establishing that the correct approach is to identify the applicable law, per Cox, and that concepts of extra-territoriality have no application to the matters in issue. I have considered whether in light of the arguments that have been deployed and my conclusions thus far I should extract this issue as a point of law for final determination at this stage, but I remind myself that the BSA is a new and developing jurisdiction, the underlying facts have not been established, and the parties’ positions have not been pleaded out. Indeed, the Defendants’ stance on the applicable law approach as it applies to Sto Germany underwent a late change before the hearing. In light of the principles set out at section E above I consider that it would be better for a final determination of this issue to be based on pleaded cases and clear findings of fact (or at least agreed facts).

Furthermore, if contrary to my primary conclusion, I accepted the submission that in principle the issue of extra-territoriality is engaged, I conclude that the Claimants would still have a real prospect of showing on the facts of this case that Parliament intended section 130 to apply to foreign defendants whether or not they had a presence within or connection to the jurisdiction. The test under section 130 is framed in the broadest possible terms (“just and equitable”). If the principle of extra-territoriality is engaged, its application would turn upon the principles set out in Competition and Markets Authority (see above) andthe activities and connections of SBG, in other words, a factual inquiry that this Court cannot undertake on the present material. It is certainly not a pure point of law.

As to the points which are made by Ms Volohonsky regarding the involvement of SBG in the affairs of Sto and Sto Germany the material is, as I have indicated, sparse, and it is not accepted by the Claimants. As Constable J observed at [61] in Crest Nicholson v Ardmore [2026] EWHC 789, the assessment of whether it is just and equitable to grant a BLO is a broad test and necessarily fact specific. Even if SBG is not the parent company of Sto Germany, it is accepted that it is a major shareholder. Whether it would be just and equitable to impose a BLO on SBG must await a closer analysis of the facts, but I am satisfied that the Claimants have a real (not fanciful) prospect of establishing that they will be entitled to a BLO against SBG.

The Defendants seek to set aside an extension for service of the claim form in the Redrow claim as against SBG. This is put on the basis that when Redrow sought and obtained an extension of time for service, it breached its duty of full and frank disclosure, in that it failed to make reference to an arguable limitation defence. In the alternative, the Defendants seek to set aside the extension on the ground that there was no good reason for the extension. Redrow denies that there were any such failures and seeks insofar as it may be necessary (by way of a rehearing) permission to extend time for service of the claim form.

The relevant procedural history is as follows. The claim form in the Redrow claim was issued on 20 December 2024. Permission was sought to serve out of the jurisdiction by an ex parte application of 23 December 2024. The application was supported by a witness statement of Mr Duncan of the same date. He noted that Ashurst had only recently been instructed and that the need to issue and apply quickly was because Sto Germany had on 11 December 2024 petitioned the Scottish Court to wind up Sto and the Claimants were concerned that delay might be prejudicial to the prospect of recovery. The order for service out was made by Jefford J on 15 January 2025. It was to be served within six months of the date of issue, i.e. by 20th June 2025. The particulars of claim were signed on 10 March 2025. The particulars of claim (along with the claim form and other documents necessary for Hague Convention service) were translated into German and not delivered to the Foreign Process Section until 28 March 2025. The Foreign Process Section advised that it could take 4 months for service which would have taken the claim form beyond its period of validity for service.

On 15 April 2025, an application was made for an extension of time for service from 20 June 2025 to 8 August 2025. The application was supported by a witness statement of Mr Gale of the same date explaining the position. On 29 April 2025, O’Farrell J made an order extending time to 8 August 2025. On 19 June 2025, Redrow applied for a further extension of time for service from 8 August 2025 to 19 October 2025. The application was supported by a witness statement from Mr Duncan of the same date, his second statement. Mr Duncan explained that the Foreign Process Section had informed Ashurst on 3 June 2025 that service had been unsuccessful as against SBG and the documents had been returned by the UK Customs office despite being checked and stamped for service and that the Foreign Process Section advised there was no error in the documents, with the likely error being in the UK Customs office. A further attempt to effect service on SBG was initiated by the Foreign Process Section, but it confirmed to Ashurst that service was unlikely to be effected before 8 August 2025. On 23 June 2025, an order extending time for service until 19 October 2025 was made by Waksman J. Service on SBG was in fact effected on 1 August 2025, so within the period of the first extension granted by O’Farrell J.

The challenge is put on the basis of an alleged failure to make full and frank disclosure of a limitation defence. There is an air of unreality about the Defendants’ stance here. Their primary position is that - by reference to the dictum of Lord Leggatt in BDW at [212] -no cause of action in contribution has yet arisen. Indeed, that is also the Claimants’ position. The basis for the application is that on 18th February 2025 the Claimants’ solicitors wrote to the Defendants stating:

“Although we do not consider that the limitation period for Contribution Act claims is near expiry... it could be argued, on a conservative basis, that the earliest date that Barratt/ Redrow’s right of action accrued is the date their SRT Contract was signed, being 13 March 2023.

Notwithstanding that we do not consider entry into the SRT Contract to be when our clients’ rights of action accrued, Barratt and Redrow are not prepared to take any risks in relation to limitation arguments that could be raised by you, not least because of the unnecessary time and costs involved in addressing them. They are therefore adopting a cautious approach in treating 13 March 2025 as the date by which limitation might expire in respect of its claims under the Contribution Act...”

The Defendants submit that where the Claimants’ solicitors themselves considered that there was an arguable limitation defence based on the limitation period expiring on 13th of March 2025, i.e. between the issue of the claim and the expiry of the claim form, that was a matter that should have been drawn to the Court's attention on an ex parte application to extend the validity of the claim form.

The Claimants’ solicitor, Mr Duncan, summarised the effect of the SRT in relation to Redrow in his first statement (in support of the application to serve out). In signing the SRT contract with the Secretary of State, Redrow “committed to investigate and where necessary remedy (or procure the remediation of) fire safety defects in the buildings which it and its group of companies developed in the period between 5 April 1992 and 5 April 2022.” He confirmed that Redrow entered the SRT on 13 March 2023 and that his current understanding was that there were approximately 128 buildings within the scope of the SRT. The particulars of claim of 10 March 2025 further state: “The quantum of the claim is currently estimated as being in the region of £27 million. The quantum is to be determined following completion of the remedial works …” It was indicated that some of the works will not relate to the Sto System. The particulars of claim went on to repeat the point made by Mr Duncan that, pursuant to the SRT, Redrow had agreed to investigate and where necessary remedy defects in relevant buildings. No further information was provided in the witness statement of Mr Gale, which supported the first (and relevant) application for an extension of time.

Section 10 of the Limitation Act 1980 sets down a special time limit for claiming contribution under the Contribution Act. Section 10(1) provides that “no action to recover contribution by virtue of that right shall be brought after the expiration of two years from the date on which that right accrued.” Section 10(2) provides that the date on which the right to recover contribution accrues is to be ascertained as provided in subsections (3) and (4). Section 10(3) relates to a contribution claim arising from a judgment or arbitration award. Section 10(4) then states:

“If, in any case not within subsection (3) above, the person in question makes or agrees to make any payment to one or more persons in compensation for that damage (whether he admits any liability in respect of the damage or not), the relevant date shall be the earliest date on which the amount to be paid by him is agreed between him (or his representative) and the person (or each of the persons, as the case may be) to whom the payment is to be made.” (Emphasis added).

This is the provision that was analysed by Lord Leggatt in BDW and I address this in section J above. (That decision was handed down on 21 May 2025, after the order of O’Farrell J.)

The principles relevant to full and frank disclosure were set out by Bryan J in Libyan Investment Authority v JP Morgan [2019] EWHC 1452 (Comm)at [92] - [97]. At [92] he referred to the principles restated by Christopher Clarke J in Re OJSC v Sibir Energy plc [2008] EWHC 2614 (Ch) which include in particular:

He went on to note at [94] by reference to Konameneni & Ors v Rolls Royce Industrial Power (India) Ltd [2002] 1WLR 1269 that “The duty of full and frank disclosure only extends to those issues which can be said to be material to the decision which the judge had to make on the application.”

The Claimants submit, and I accept, that entering into the SRT is a commitment to investigate and where necessary remedy defects in buildings. It is not an agreement as to the “amount to be paid”. It is not the type of step which is capable by itself of starting time running under section 10 of the Limitation Act 1980. Indeed this is the Defendants’ position. The Claimants say that there is no realistic limitation defence based on the SRT and the mere raising of that possibility by the Claimants’ solicitor in correspondence (albeit in the context of denying it) does not create such a defence. They submit that there is no obligation to raise hopeless points which could have no realistic effect on the decision maker when seeking an extension of time.

In exercising my discretion, I identify the following relevant factors:

Accordingly, exercising my discretion, I refuse the Defendants’ application to set aside the extension of time on the basis that there was a breach of the duty of full and frank disclosure.

In the alternative, the Defendants challenge the extension on the basis that there was no good reason for it.

It appears that there were various disputes between the parties relating to service. By a consent order approved by O’Farrell J on 15^th December 2025, the parties settled disputes as to (a) late filing of acknowledgment of service by the Defendants and (b) suggestions of defects in service by the Claimants. The allegations on both sides were abandoned, save specifically for the full and frank disclosure allegation. Paragraphs 1 and 2 of the order stated:

“1.

The service of the Claim Form and Particulars of Claim was validly effected: 1.1 against the Second Defendant on 11 April 2025; and 1.2 subject to paragraph 2 of this Order, against the Third Defendant on 1 August 2025.

2.

The Third Defendant reserves its position that a failure to make full and frank disclosure by the Claimants at the time of seeking extensions of time for service of the Claim Form and Particulars of Claim as set out at paragraphs 16 and 20 of the First Witness Statement of Lorna Rachel Emson dated 10 October 2025 should lead to the setting aside of the Orders dated 29 April 2025 and 19 June 2025 (the "Reserved Grounds").”

The position is clear. The reservation is limited and specific. Only the full and frank disclosure point remained open to SBG; other challenges to the validity of service were abandoned as part of a compromise with the Claimants. It is not open to SBG now to argue that service was invalid on the grounds that the extension should not have been granted because there was no good reason for it. Indeed, I did not understand the Defendants to argue to the contrary at the hearing.

If it had been necessary to do so, I would have found that the Claimants did not have a good reason for the extension under CPR 7.6(2). Extensions to the validity of a claim form are not lightly granted. Since the period between issue and service of a claim form is an extension of the limitation period, it must be strictly regulated by the Courts: see Aktas v Adepta [2010] EWCA Civ 1170 at [91] per Rix LJ.

The relevant principles for the exercise of the court’s discretion were set out in Vauxhall Motors Ltd v DENSO Automotive UK Ltd [2025] EWHC 213 (Ch) at [42]. Those principles include:

In this case the chronology shows that the claim form was issued on the 20th of December 2024. I accept that proceedings were issued at that time because of concerns related to the winding up of Sto, but the particulars of claim were not signed until 10th March 2025. They were then translated into German and not delivered to the Foreign Process Section until 28th March 2025. At that point, the Claimants’ solicitors were advised that it could take four months for service. The claim form could have been served without the particulars of claim. The delays in drafting and signing the particulars of claim and in translating the documents into German are effectively unexplained, and so, for these reasons, if it had been necessary to do so, I would have found that the Claimants had not established a good reason for the extension of time.

Accordingly, I conclude as follows: