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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 1354 (TCC) (05 June 2026) URL: https://www.bailii.org/ew/cases/EWHC/TCC/2026/1354.html Cite as: [2026] EWHC 1354 (TCC)

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IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (KBD)

		Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL
		5 June 2026

 


Remote hand-down

This judgment was handed down remotely at 10am on 5 June 2026 by circulation to the parties or their representatives by email and by release to The National Archives.

I direct that pursuant to CPR PD 39A paragraph 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

His Honour Judge Stephen Davies

HHJ Stephen Davies:

Sections:		Pars.
A	Introduction and summary of decision	01 - 12
B	The parties	13 - 16
C	The witnesses and my approach to the evidence	17 - 49
D	Chronology of important events	50 - 153
	(i) 2005-2006 - the cladding replacement contract	54 – 70
	(ii) 2007 – the original lease	71 – 80
	(iii) Essendi's knowledge of fire safety risks from the use of category 3 ACM cladding panels from 2006 to 2017	81 – 93
	(iv) LPC's acquisition of the freehold of the Hotel and the entry into the current lease	94 – 97
	(v) Investigations into the cladding post-Grenfell	98 – 109
	(vi) The notifications by Essendi and LPC's response	110 - 124
	(vii) The issue of proceedings and the closure decision	125 - 153
E	The first core issue: does the cladding require replacement and, if so, why and in what timeframe?	154 - 215
F	The second core issue: the justification for and reasonableness of the closure decision	216 - 273
G	The terms of the original lease and the current lease	274 - 289
H	The interpretation of the disputed terms of the original lease and the current lease	290 – 357
	(i) The cladding provisions of the original lease	291 - 303
	(ii) The landlord's good condition covenant	304 - 339
	(iii) The landlord's legal obligations covenant	340 - 357
I	Issue 1 – the claim under the good condition covenant	358 - 381
J	Issue 2 – the claim under clause 4.6 and the Fire Safety Order	382 – 446
K	Issue 3 – the claim for derogation from grant	447 – 464
L	Issue 4 – the claim for specific performance	465 - 483
End

A. Introduction and summary of decision.

1. The principal issue in this case is who, if anyone, is responsible for undertaking major building safety works to remove external cladding from the multi-storey tower block which houses the Ibis London Wembley hotel ("the Hotel building" and "the Hotel" respectively). Both parties' fire safety experts agree, in summary, that the external cladding panels ("the cladding panels") represent an "intolerable risk" of fire and must be removed. This is due to the fact that they are a sandwich, with outer aluminium sheets and an inner, highly combustible, polyethylene ("PE") core; commonly referred to as ACM (aluminium composite material).
2. Such PE core ACM cladding panels were a principal cause of the tragic Grenfell Tower fire, so that the fire safety risk due to their presence on the Hotel building is not in doubt. Before Grenfell, PE core ACM panels were so called to distinguish them from fire resistant ("FR") core ACM panels. Post-Grenfell, testing was undertaken which resulted in ACM being divided by the Building Research Establishment ("BRE") into three categories, where category 3 is "highly combustible". PE core ACM panels thus became known from July / August 2017 as category 3 ACM panels ("category 3 ACM panels").
3. The Claimant ("Essendi"), as the tenant and operator of the Hotel, says that it is the Defendant ("LPC") as its landlord and the owner of the Hotel building which is responsible for their removal. It says that this arises pursuant to either: (i) the landlord's "good condition" covenant in the current version of the lease as made between them ("the current lease"); or (ii) a combination of the landlord's "legal obligations" covenant in the current lease and the Regulatory Reform (Fire Safety) Order 2005 (the "FSO"); or (iii) under its obligation as landlord not to derogate from its grant of the lease. It seeks an order for specific performance against LPC requiring it to replace the category 3 ACM panels with non-combustible cladding panels. Essendi's arguments are novel, in that it is relying on these landlord covenants under a commercial lease to obtain what is, in substance, a building safety remediation order against LPC, in circumstances where the Building Safety Act 2022 does not apply to certain categories of buildings, including hotels.
4. LPC's first line of defence is that it is not liable under the lease covenants on a proper application of the law and the facts. Its second line of defence is that, even if it were otherwise liable under the lease, it has a defence and counterclaim under which it can escape any such liability.
5. This defence and counterclaim arises from the following facts: (a) it was Essendi which engaged contractors to replace the existing cladding panels with the category 3 ACM panels at the Hotel building in 2005, at a time when Essendi was the full owner of the whole of the Hotel building; and (b) when Essendi entered into a lease with LPC's predecessor in title ("the original lease"), it undertook bespoke remedial and indemnity obligations as regards any defects in the cladding panels until what was referred to as the "cut-off date".
6. However, LPC's immediate difficulty is that the cut-off date occurred just under a month before the Grenfell fire, in circumstances where it is well known that it was only after the Grenfell fire that the construction industry fully appreciated the seriousness of the fire safety risks of PE core ACM panels. Thus, unless LPC can establish that Essendi is: (a) strictly liable under the original lease for the fact that the cladding panels were defective; or (b) was, or ought to have been, on notice of the fire safety risk and the need to take remedial measures, it will not be able to rely on these remedial and indemnity provisions as a defence.
7. Essendi also seeks to recover its losses flowing from its decision to close the Hotel on 29 July 2025. Permission to amend to bring this secondary claim was granted by order of Mr Adrian Williamson KC, sitting as a Deputy High Court Judge, following a contested hearing on 5 December 2025.
8. By virtue of the orders made by Constable J at the first case management conference on 4 July 2025 and by Mr Williamson on 5 December 2025, the current trial is limited to the issues of liability which also, as directed by Mr Williamson, include the question as to whether LPC is liable for the losses caused by Essendi's decision to close the Hotel, but not the quantification of such losses or whether a particular loss was caused by any established breach^[1].
9. The case has been strongly contested. The parties are, of course, fully entitled to disagree about, and to require the court to decide, who should undertake and bear the cost of the remedial works. Nonetheless, it is regrettable that the parties have been unable to agree on a procedure for undertaking and paying for the works and for arguing about the costs later, especially given the views of both fire safety experts that the category 3 ACM panels represent an intolerable fire risk and must be removed. The parties appear to have allowed disputes as to responsibility for cost, as well as their history of mutual suspicion and antagonism, to triumph over adopting a constructive interim solution. The end result of this failure is that one or the other of them will have to absorb the potentially very significant costs of closure of the Hotel, which could have been avoided, as well as the costs of the remedial works.
10. The proceedings and the trial itself have both been conducted to a demanding timetable, because Constable J directed an accelerated procedural timetable, which reflected the urgency of having these disputes resolved so that remedial works could begin to be planned and undertaken. I am most grateful to the solicitors for working very hard to ensure that the trial was able to proceed in accordance with that timetable. Counsel prepared for and conducted the trial with great industry and skill to ensure that everything was concluded in the seven trial days allocated. I have had to be selective in my factual account and legal analysis. I have concentrated on deciding the issue in dispute, rather than conducting or writing a detailed treatise on the history of events (and inaction) leading up to the Grenfell fire or about the wider operation of the FSO. The former is already well-documented. The latter is more properly the subject for an academic treatise than an extended treatment in this judgment.
11. I have divided this judgment into sections. I have adopted an approach of deciding the two core issues of mixed fact and law first, even though they cannot completely be severed from the conclusions I reach later as regards the individual allegations of breach or in relation to specific performance. It follows that the judgment must be read as a whole.
12. My conclusions are as follows:

i) LPC is in breach of the good condition covenant in failing to remove and replace the category 3 ACM cladding panels. Its defence and counterclaim based on the terms of the original lease in relation to responsibility for the cladding fails.

ii) LPC is also, and independently, in breach of the legal obligations covenant by reference to its obligations under the FSO.

iii) LPC has not breached the implied covenant not to derogate from grant.

iv) Essendi's decision to close the Hotel on 29 July 2025 was caused, in fact and in law, by LPC's breaches and was a reasonable decision for it to take in all of the prevailing circumstances at the time.

v) Essendi is entitled to an order for specific performance requiring LPC to: (a) remove the category 3 ACM cladding panels within 6 months; and (b) replace them with suitable alternative external cladding within an overall period of 18 months.

vi) Essendi is entitled to proceed to an assessment of the damages to which it is entitled, which will be the subject of a further trial in accordance with further directions to be given unless the parties are able to resolve their differences in the meantime.

B. The parties.

13. Essendi was previously named Accor UK Economy Hotels Ltd. As that name suggests, the company was part of the global Accor hotel group, whose ultimate parent company was Accor SA, a French listed company. Accor SA, according to the evidence, owns and operates over 5,000 hotels in 100 countries, with those hotels being divided into over 45 brand names. Ibis is one such brand name, sitting within Accor's "economy" segment.
14. Prior to 2018, the companies within the Accor group, including Essendi, both owned and operated the hotels within the group. A decision was taken in 2014, but not fully implemented until 2018, to separate the hotel ownership and operation side of the business from the hotel management side of the business. The former became known initially as AccorInvest and is now known as Essendi, with the ultimate parent company being Essendi SA, whereas the latter remains known as Accor with Accor SA as its ultimate parent company.
15. Accordingly, prior to 2018 Essendi was responsible for all aspects of the business of owning and operating the Hotel, including the management of the hotel as an operating hotel, whereas after 2018 it was responsible only for the ownership and operation of the Hotel as an asset, and a separate company - known as Accor HotelServices UK Limited - was responsible for the management of the Hotel as an operating hotel. This division of responsibilities was effected pursuant to a formal Hotel Management Agreement. Ultimately, this separation makes no difference to the case, at least as regards the issues of liability which this trial and judgment address, but it has been necessary to understand which departments and/or which individuals were responsible for which different functions in relation to the Hotel.
16. LPC is a company incorporated in the Isle of Man which owns and operates commercial property, including the Hotel building. Its directors are apparently all based in the Isle of Man. It has no employees. It has engaged a separate company known as Criterion Capital Limited ("Criterion") to manage its properties. The common link is Mr Asif Aziz, who is the CEO of Criterion and also has an interest in and control of LPC, which is an Aziz family-owned company. It appears from Mr Sell's evidence that until March 2025 Mr Aziz was regularly present in the UK and regularly involved in Criterion's business activities, whereas after that he has been domiciled out of the UK so that his ability to enter the UK is restricted.

C. The witnesses and my approach to the evidence.

17. As is usual in Technology and Construction Court trials, the evidence comes principally from three sources: (a) the contemporaneous documents; (b) the factual witness evidence; and (c) the expert evidence.
18. In deciding this case I apply the well-known and well-established approach adopted in the majority of Business and Property Court cases to fact-finding. In such cases: (a) particular weight is usually attached to the contemporaneous documents as the most reliable source of factual evidence; and (b) it is usually appropriate to consider with particular care the reliability of the factual evidence adduced by witnesses where that evidence is inconsistent with that contemporaneous documentation, bearing in mind the number of different ways in which the reliability of witness evidence can be adversely affected by the time they come to make their witness statements and to give evidence at trial. In the latter respect, I refer particularly to the observations of Cockerill J in Jaffe v Greybull Capital LLP [2024] EWHC 2534 (Comm) at paragraphs 195 to 201, where she made reference to cases frequently cited in this context, such as Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) and Simetra Global Assets Ltd v Ikon Finance Ltd [2019] EWCA Civ 1413 [2019] 4 WLR 112, as well as to a lecture given by Sir Andrew Popplewell to COMBAR in 2023, entitled "Judging Truth from Memory".
19. Further, whilst it is often convenient, and sometimes unavoidable, when writing an inevitably lengthy judgment to consider the documentary evidence, the factual evidence and the expert evidence separately, or to consider the issues separately, nonetheless in reaching my overall decision as well as reaching my decision on the individual issues I do so by reference to the totality of the evidence from all sources and in relation to all issues.
20. In this case, LPC submitted that there was a significant absence of relevant documents disclosed by Essendi, in particular in relation to events occurring prior to the cut-off date. This was strongly contested by Essendi, submitting that: (a) Constable J had directed standard disclosure; (b) Essendi had been open with LPC as to the way in which it proposed to undertake an electronic disclosure process, including sharing its intended key word searches, which was not challenged and which resulted in a large number of documents being disclosed; (c) there had been a number of contested disclosure applications so that LPC had taken full opportunity to challenge Essendi's disclosure pre-trial. In short, I accept Essendi's submissions on this point. In my view the real focus of the complaint was that Essendi's disclosure did not reveal the documentation which LPC hoped that it would, i.e. documentation showing that Essendi was fully aware of the risk of the presence of category 3 ACM panels and the consequences of their presence before the cut-off date. That is not a basis for concluding that the disclosure undertaken by Essendi was flawed, let alone – if it be suggested – that damaging documents were deliberately suppressed. In particular, I do not regard the late production of certain documents by Essendi's witness Mr de Menthiere shortly before trial as indicative of such conduct.
21. On the contrary, in my view there is a more surprising absence of internal emails, especially between Mr Aziz on the one hand and the witness Mr Sell and his predecessor on the other as to the investigations undertaken by Criterion into the cladding panels and in relation to the instructions given to the witness Ms Sharma. However, since nothing of real consequence turns on the presence or absence of such documentation, given the conclusions I have reached on the facts in relation to the issues to which they might have been relevant, I need say no more about that.
22. There was also a submission by LPC that adverse inferences should be drawn against Essendi from its failure to call no fewer than five witnesses who – I accept – it appears Essendi could have called had it wished to do so. These included Mr Gilles Clavié (CEO of Essendi SA), Ms Alice Neubert (co-director of Essendi), Mr Sebastian Ardaillou (Essendi's UK health and safety manager), Mr Romain Hourqueig (Essendi's long standing fire safety engineering consultant) and Mr Stephen Field (regional technical manager in 2017).
23. One immediate difficulty with this submission was that at the case management conference Constable J had made an order limiting the parties to three witnesses each. This limit was increased by Mr Williamson to four, with the additional witness to deal solely with the closure issue. Since Essendi had called its full complement of four witnesses, to succeed in the submission made to me LPC would have needed either to identify which witnesses Essendi should have called in preference to those which it had called, or to establish that it should have applied for permission to call further witnesses (and, of course, that such permission would have been granted). Since LPC had never identified any such witnesses in pre-trial correspondence, nor asserted that if Essendi did not adduce evidence from them it would invite the court to draw an adverse inference, both were ambitious submissions.
24. Moreover, in my judgment, it was perfectly reasonable for Essendi to choose to call the witnesses which it did, namely: (a) Mr Van Der Graaf to deal with the closure issue, which Mr Clavié and Ms Neubert could also have dealt with; (b) Mr Dubaere, who was able to give evidence as regards the cladding issues from 2010 to 2020, especially since he was responsible for the management of the Hotel up to 2018; (c) Mr Carr, who was Mr Field's immediate superior and was able to give similar evidence to that which Mr Field could have given; (d) Mr de Menthiere, who was able to give evidence in relation to the maintenance of the Hotel and other similar hotels and the investigations into the cladding post-Grenfell. I am prepared to accept that Mr Ardaillou might have been called instead of Mr Dubaere or Mr de Menthiere, but not that it should have been obvious to Essendi or its lawyers that it needed to do so. Given that Essendi was calling its independent fire safety expert, Mr Bullock, I do not accept that it was necessary to call Mr Hourqueig as well. The extent of the involvement of both men, and their knowledge and input, is sufficiently revealed by the wealth of the contemporaneous documents which Essendi has disclosed.
25. I am also satisfied that the absence of Mr Clavié and/or Ms Neubert as witnesses does not justify the court drawing the inference, as LPC submitted that it should, that contrary to Mr Van Der Graaf's version of events "the reasons driving the decision to close the hotel were (i) in response to the decision of Constable J to transfer the claim out of the Shorter Trials Scheme and so to put legal pressure on LPC, and/or (ii) better to facilitate works to the lifts and/or (iii) more generally, not thought-through and as a knee-jerk response to some superficial advice provided by Mr Bullock". The wealth of contemporaneous documentary evidence disclosed by Essendi, as well as the detailed cross-examination of Mr Van Der Graaf and Mr Bullock, provides entirely adequate material to deal with these submissions.
26. I am also quite satisfied that there is no basis for the further submission by LPC that the failure to call Mr Ardaillou, Mr Hourqueig or Mr Field would justify my drawing an inference that Essendi had knowledge of the risks posed by combustible cladding on hotel buildings prior to the cut-off date. In any event, knowledge of such risks in the abstract, in the absence of knowledge that the cladding on the Hotel building was combustible, would not in itself be of any significant relevance to the case. Finally, since there is no evidence of any relevant involvement from Mr Hourqueig before early 2025, it is not at all clear what he could have been expected to say about this as a consultant and, in reality, as an impermissible second quasi-expert witness - rather than as an employee.

The witnesses of fact who were called.

27. The first witness called by Essendi was Mr Martijn Van Der Graaf. Mr Van Der Graaf became responsible for the Hotel (as part of a portfolio of around 80) in November 2020 in his capacity as head of portfolio management for Essendi and has been a director of Essendi since April 2021. As at July 2023, he was the chief operating officer for Essendi and was responsible for the Hotel, reporting direct to the CEO of its parent company, Mr Gilles Clavié.
28. He was present at the closure meeting and, together with his fellow director Ms Alice Neubert, took the closure decision in which they were supported, he says, by Mr Clavié.
29. He gave evidence for a full day. In my assessment he was intelligent and knowledgeable. He was also honest and fair-minded. There were a small number of occasions when, facing what he could see were difficult questions, he sought to deflect them by giving a lengthy answer which did not directly deal with the question. Generally, however, I consider that I can place reasonable weight on his evidence.
30. The second witness called by Essendi was Mr Thomas Dubaere. Mr Dubaere was responsible for the management of the UK Accor economy brand hotels, including Ibis, from 2010 to 2020, when he moved to work for Accor in South America.
31. His evidence concerned his knowledge of any cladding issues with the Hotel building over that period. In short, his evidence was that neither he nor anyone else within Essendi had any knowledge of category 3 ACM panels at the Hotel building or the risks associated with their use before Grenfell.
32. I accept his evidence as regards his own knowledge. As regards the knowledge of others, I must test that proposition against the documentary evidence and against LPC's submissions and I will deal with that point below once I have done so.
33. The third witness called by Essendi was Mr Paul Carr. Mr Carr has been the technical director for Essendi hotels in the UK since June 2018. In that capacity he has been responsible for the maintenance of the Hotel along with the regional technical manager responsible for the Hotel, who reported to him. He had a general awareness of the investigations as to the external cladding to the various Essendi hotels undertaken post Grenfell. He gave particular evidence in relation to the Ibis Hounslow hotel which, LPC submits, was treated in a different way to the Hotel. He also gave evidence in relation to the lift works issue raised by LPC. He was also present on the call meeting leading to the closure decision.
34. Again, I accept his evidence as broadly reliable.
35. The fourth and final witness called by Essendi was Mr Charles de Menthiere. Mr de Menthiere was responsible for the financial management of the Essendi hotels from 2014 to 2020 in relation to matters such as maintenance. His evidence was largely to the same effect as Mr Dubaere, also giving evidence as to the investigations as to the external cladding to the various Essendi hotels undertaken post Grenfell. He was a little nervous whilst giving evidence but, generally, I accept his evidence as broadly reliable.
36. The first witness called by LPC was Mr Andrew Sell. Mr Sell was a chartered surveyor who began working for Criterion as an asset manager in 2018, first full time and from 2021 part time.
37. I found Mr Sell to be a somewhat unconvincing and unreliable witness, insofar as his evidence was not corroborated by contemporaneous documentary evidence. He seemed to have little detailed recollection of events and his recollection often conflicted with the contemporaneous documentary evidence. In his witness statement he had made a number of wild allegations against Essendi which, when pressed by reference to the contemporaneous documents, he either withdrew entirely or rowed back from.
38. He had not helped his cause by filling his witness statement with evidence of events of which he had no personal recollection and with copious statements of opinion. This was despite the fact that both he and the solicitor in question had signed statements of compliance which – I have no doubt - could never have been signed conscientiously if they had been carefully read and followed. I tend to have more sympathy for the witness than the solicitor in such circumstances, because most witnesses are unfamiliar with the process and are likely to rely on what they might reasonably assume to be the professional experience of the solicitor. However, I have less sympathy for Mr Sell in this case, because the extent of the divergence from the certificate was so gross.
39. My strong suspicion, not least because of the consistency between this statement and some of that of Ms Sharma (below) as well as the tenor of some of the pleaded case and LPC's solicitors' correspondence, is that much of the evidence in this case in reality emanates from the man behind both LPC and Criterion, Mr Aziz, who in my view plainly could and should have been called as a witness, unless there was some very good reason for not doing so. Mr Aziz appears to have been the only person with a role both in LPC and in Criterion. He also appears to have been the only person who has been involved in events on the defence side from start to finish. Although he is now resident out of the jurisdiction and may only return to the UK for limited periods, that plainly does not afford any excuse for his not providing a witness statement or giving evidence in person or – if his absence from the UK genuinely prevented him from giving evidence in person – by video-link.
40. Although both Mr Sell and Ms Sharma were keen to describe Mr Aziz as a "big picture" man, which was presumably intended to support the decision not to call him because he could not have dealt with the details, that is belied by the documented extent of his involvement in the case from start to finish, which shows that on occasions (although I accept not always) he was directly involved in the details. Given that the other person who would have been called to deal with such matters was Mr James Burfitt, who had been the head of construction at Criterion for 8 years but who, tragically, was diagnosed with a terminal condition in January 2025 from which he has since died, it appears inexplicable to me that Mr Aziz did not make a witness statement or give evidence. That is even more so when Mr Sell confirmed in cross-examination that he did not have full delegated decision-making capacity, so that he would have had to obtain instructions from Mr Aziz for all major matters, which plainly included dealing with Essendi in relation to the strategic issues arising from cladding issues at the Hotel building.
41. Whilst I found Ms Sharma a more impressive witness than Mr Sell, I was not particularly convinced by the substance of her evidence, for two principal reasons. First, the principal tenor of her evidence was to seek to defend LPC's conduct of its investigation of the cladding issues in response to Essendi's submission of evidence in November 2024 showing that the cladding panels were category 3 ACM panels, which she had been retained to address as an external consultant in December 2024. However, on analysis, most of her explanations were fundamentally unconvincing and amounted to little more than a litany of excuses for what was, in reality, almost complete inaction in addressing the cladding issues, compared with a willingness to go on the offensive in relation to the defence of the litigation. Second, because she appeared to have provided surprisingly few documents which evidenced the instructions given to her firm or her dealings with Criterion. I am suspicious that this is because a full disclosure of that correspondence would have revealed the true extent to which she was being used by Mr Aziz to support and justify his litigation strategy in this case.
42. In conclusion, whilst I am critical of the failure to call Mr Aziz to give evidence about the conduct of LPC in relation to the cladding issues and, instead, to seek to put up Mr Sell as a semi-retired consultant and Ms Sharma as a relatively detached H&S consultant to address the facts in issue, since I do not need to draw any adverse inference to assist Essendi in relation to the key facts in issue I do not do so.

The expert witnesses.

43. As regards the cladding experts, there was a considerable amount of agreement between Mr Gray for Essendi and Mr King for LPC. They were both knowledgeable and fair-minded expert witnesses. Their evidence did not go to any of the most significant issues in the case, so that it is not necessary for me to say any more about their evidence generally, it being sufficient to refer to it as and where necessary in the course of this judgment.
44. As regards the fire safety experts, there was also a considerable amount of agreement between Mr Bullock for Essendi and Mr Van Gorp for LPC, who were also both knowledgeable and fair-minded expert witnesses.
45. As already flagged, in relation to the key issue in the case they both agreed that the category 3 ACM cladding panels represented an intolerable fire risk and required to be removed and replaced, albeit there was some disagreement about the timescale. They also disagreed about the ways in which the category 3 ACM cladding panels might cause or propagate a rapidly spreading fire, and thus the degree of risk of a fire occurring or being spread in that way, although they agreed that if the panels did catch fire they would propagate it rapidly. They also disagreed about the degree of risk to occupants of the Hotel and to occupants of the adjoining properties from such a fire, the former in the context of a disagreement about the likelihood of all occupants being able to evacuate the Hotel safely before being placed at risk of injury from fire and the latter in the context of the risk of any fire spreading to an adjoining property, although fundamentally it was common ground that there was a serious risk to occupants of the Hotel and at least some risk to occupants of the adjoining properties. They also disagreed as to the extent to which further mitigation measures which could be undertaken by Essendi at the Hotel could reduce these risks.
46. This is not a case where I can confidently prefer the opinion of one expert over the other on all such matters.
47. It seemed to me that Mr Bullock relied heavily on his expertise (which is significant) and adopted a conservative approach to fire safety risks in this case, based largely on the combination of the very considerable fire safety risk presented by the presence of the category 3 ACM cladding panels on a multi-storey tower block and the risk that, in the event of a major night time fire, there would be a potentially significant number of potentially highly intoxicated and/or heavily sleeping guests with no familiarity with the Hotel, whose risk of causing a fire would be significantly increased and whose response time would be significantly impacted as a result. He was also more conscious of the risks of criminal prosecution and the risks to the reputation of the Essendi company and its hotel brands, in the event of a fire occurring at a time when it was known by Essendi that the Hotel building was clad in category 3 ACM cladding panels and yet Essendi had continued to operate the Hotel.
48. In contrast, it seemed to me that Mr Van Gorp and his team had adopted a more technical approach to the risk assessment process but had, fairly consistently, adopted an approach to that assessment process which resulted in a minimisation of that risk. They had also assumed that it was reasonable to adopt an approach which assumed that a further package of mitigation measures could be put in place and would be effective, without undertaking any detailed investigation either as to the practicability of those measures or their cost or timescale for implementation.
49. In summary, I have no doubt that Essendi reasonably relied upon Mr Bullock when making its decision to close the Hotel in July 2025. Further, whilst I accept that Mr Bullock had made a number of criticisms of Mr Van Gorp's technical approach which he had to withdraw or at least row back from or qualify in cross-examination, on balance I am inclined to accept his opinion on the key issues as being more in line with a suitably conservative approach to fire risk safety assessment than that of Mr Van Gorp.

D. Chronology of relevant events.

50. The relevant chronology begins in 2001, when Essendi as the then owner of the land in question entered into a contract for the design and construction of the Hotel building, as a purpose-built 16-storey (42.5m high) 210-bedroom hotel at South Way, Wembley, with Jarvis Construction as building contractor. Post completion, Essendi took over and began to operate the completed Hotel in 2002, its customer base being primarily those attending events, typically sports and music-related, at the nearby Wembley Stadium.
51. Essendi and its witnesses, including Mr Bullock, have emphasised that hotel guests who are staying overnight in an unfamiliar hotel after attending such events are likely to be less willing or able to respond to fire safety related instructions and warnings, including evacuation warnings, than those who are either more familiar with their surroundings (for example, the occupants of flats within a multi-storey apartment block) or less affected by alcohol or drugs (for example, hotel guests staying on business or as a family). I accept this as a general proposition, and I also note the evidence that on one occasion a flare was discharged outside the Hotel, but I should also record that there is no direct evidence of widespread intoxication or misbehaviour nor of specific fire evacuations which were hampered by such causes.
52. The bedroom floors begin above the ground and mezzanine floors. Structurally, the Hotel building is made of precast reinforced concrete slabs and walls. The external envelope initially comprised an aluminium rainscreen system with double glazed windows, fixed to the concrete structure by aluminium rails and brackets. This system did not give rise to any material fire risk because the aluminium panels were made of solid aluminium rather than ACM with a PE core.
53. At this stage there was an existing building, known as Mahatma Gandhi House, built very close to the western elevation of the Hotel. This was owned and used by the local authority as office accommodation for its housing department. It extended up to the height of the 10^th floor slab level of the Hotel building. Probably due to access difficulties, it was decided not to clad this section and, instead, to install flashing to provide a weathertight seal between the top and sides of the existing building and the new Hotel building at this location.

(i) 2005 – 2006: The cladding replacement contract.

54. By October 2002, a number of existing cladding panels had detached. This was, of course, a potential major safety risk if they fell from height. Investigations revealed deficiencies in the installation process and Essendi's engineering consultants, the Waterman Partnership, produced a report recommending the complete replacement of the existing panels. Essendi accepted this advice and instructed the Waterman Partnership to undertake the procurement process. At this stage, there was no suggestion of installing a different cladding panel system and the ultimate contractor, a company known as Weatherwise, tendered for two alternative systems, one being a FF2 aluminium rainscreen system produced by a company known as CGL Systems ("CGL"), which the Waterman Partnership recommended be accepted, and which would not, had it been installed, have created a fire risk.
55. On 23 May 2005 Essendi entered into a standard JCT design and build contract with Weatherwise in the form of a deed for the completion of the design and the supply and installation of replacement cladding ("the cladding contract"). However, by that time, the specified cladding system had been changed to a new Reynobond rainscreen cladding system, also supplied by CGL. It is clear from the contemporaneous documentary evidence that the rationale for this change was not to save money, because this Reynobond system was more expensive than the originally tendered system, but rather to more accurately replicate the sleek appearance of the original cladding panels. A contemporaneous email from CGL explained that the panel material had been altered from the original proposal but, because it had already been engineered, required no additional testing. The attached data sheet made clear that it was an ACM system, using a thermoplastic^[2] 3mm core sandwiched between two 0.5mm aluminium sheets. It also identified the various fire ratings for the system. One such was Class O which, as Mr King identifies in his report, met the provisions of Approved Document B ("ADB") Diagram 40 at the time of submission for Building Regulations approval. On this basis, he says, they were apparently compliant with the Building Regulations 2000 although, as he also says, "it is now known that the ACM panels' polyethylene core provides a medium for fire spread, contrary to the provisions of Approved Document B paragraph 13.7".
56. There is no suggestion that a fire safety engineer was instructed, either in relation to the original construction works or the cladding contract works. Nor is there any suggestion that anyone identified the fire risk caused by the specification and use of the Reynobond rainscreen cladding system at this point in time. This is not surprising, given the general lack of knowledge of the fire safety risks of using ACM with a PE core cladding panels in the construction sector at the time, as described in the Grenfell inquiry reports.
57. Practical completion of the cladding contract works was achieved on 26 May 2006.
58. An operations and maintenance ("O&M") manual was produced in relation to the cladding contract works. It included a material schedule which included the rainscreen panels as supplied by CGL as "ACM", without explaining the significance of that reference. There was another datasheet from CGL in the O&M manual which stated that "all CGL systems are fully tested for … fire … and are also compliant with the "Standard for Ventilated Facades" as produced by the Centre for Window and Cladding Technology" ("CWCT").
59. This was a reference to the July 1998 version of the CWCT standard, which formed part of the cladding contract performance specification. Clause 2.20.06, headed "composite materials", stated that "when one of the rainscreen cladding elements … is a composite of two or more materials … the individual elements, including adhesive must demonstrate the appropriate fire performance …". There is some evidence from which it appears that this was not intended by the CWCT at the time to refer to cladding panels such as those used here, as opposed to composite sandwich panels used in industrial fridge units where concerns had been raised by insurers about fires. Whilst that limitation is not apparent from – or indeed consistent with in my view - the face of the document, it is not suggested by Mr King for LPC that this standard was taken by designers and architects at the time as referring specifically to category 3 ACM cladding panels. In any event, taken at face value the CGL datasheet would have indicated that the cladding panels supplied did meet that requirement.
60. In submissions, LPC has also referred to building inspection reports disclosed by Essendi from 2006 onwards, where reference is made to deleterious composite cladding but, in my judgment, it is clear from the context of these documents that these are referring to the composite sandwich panels used in the industrial fridge units. Mr Van Gorp accepted as much in cross-examination.
61. Moreover, as Essendi submits, whilst the documents referred to above do refer to the Reynobond system as being an ACM system, they do not indicate whether the thermoplastic core was a simple PE core or a fire-resistant FR core. Instead, as noted above, they positively state and represent that the system was fully tested for fire, met fire ratings and complied with the CWCT standard.
62. The evidence referred to in the findings of the Grenfell Tower Inquiry, Phase Two Report demonstrates that at the time Arconic (the manufacturer of Reynobond) manufactured and sold: (i) the Reynobond with a PE core (i.e. aluminium composite material with a 100% PE core and no added fire-resisting mineral); (ii) Reynolux, a solid aluminium product; and (iii) Reynobond ACM with a FR core, i.e. a thermoplastic core with mineral added to improve fire performance (see pars. 17.22-23 and 18.1). As the report also notes, all three products, i.e. Reynolux, Reynobond PE and Reynobond FR, were produced with the same choice of coatings (Phase 2 Report, par. 18.22). Thus, it would be difficult to discern which Arconic product had been supplied once it was affixed to a building without destructive testing, because all that can be seen from a visual inspection is the outer aluminium surface.
63. In submissions, LPC appears to suggest that it was somehow Essendi's responsibility to ensure that the composite parts of the cladding panels which were supplied and installed demonstrated appropriate fire performance. No basis for this submission is advanced. So far as the procurement process is concerned, this was plainly an obligation which was imposed on Weatherwise under the cladding contract. Further, there is no evidence that the Waterman Partnership as Essendi's professional design consultants ever provided any advice or warning to Essendi in relation to the change of cladding panels so far as any fire safety issues were concerned. Nor is there any evidence that anyone at Essendi was aware at the time either that the Reynobond panels supplied were PE panels as opposed to FR panels or that there were fire safety issues associated with the use of PE panels which differed from those associated with the use of FR panels. Under cross-examination Mr King accepted that there was no reason why a client would not have taken what was stated by CGL at face value.
64. In the circumstances, there is no basis in my judgment for LPC's submission that "basic due diligence on Essendi's part would have revealed that it had specified a product for the building without any proper understanding or verification of its fire performance". It is doubtless true that, if Essendi had taken it upon itself to ask the Waterman Partnership to provide or procure such advice, it would have discovered either from asking CGL or from opening up and testing a sample panel that PE panels had been specified and supplied which had a higher fire risk than solid aluminium or FR core panels. However, that assumes that a responsible building owner in around 2005 would have believed that it had a separate duty to ask its professional advisers (or its design and build contractor) for such specific advice, if nothing had been brought to its attention which indicated that fire performance was an issue. There is no evidential basis for such a submission in this case.
65. The cladding experts have addressed the state of knowledge in the construction sector as at 2006 in their joint statement and reports. I refer to the view of LPC's expert Mr King. In short, he believes that a competent architect / designer (by which he means one that was experienced in the re-cladding of high rise buildings) should have been aware of the risks associated with fires in high-rise towers following trade and national press coverage of earlier fires, but he also acknowledges that they are unlikely to have been aware of the specific performance risks associated with ACM panels - as indeed is evidenced by the widespread use of ACM panels in high-rise towers at the time.
66. Whilst he says he would have expected an international hotel operator with high-rise hotels in both the UK and overseas (including Dubai) to have been aware of these well-publicised reports and, therefore, aware of the risk of fire in cladding on high-rise buildings, he acknowledges that he would not necessarily have expected Essendi to have been familiar with the mechanics of ignition and propagation or the details of the ADB guidance. In short, he does not suggest that someone in the position of the Waterman Partnership, let alone Essendi, ought to have been placed on notice of a fire safety risk by reference to the specification of ACM cladding panels at the time of the cladding panels replacement contract. In cross-examination he also accepted that the then current CWCT standard did not specifically refer to ACM.
67. Mr King also refers to an email from Mr Jordat of Essendi's construction team dated 28 November 2003, sent to representatives of the Waterman Partnership and commenting on a specification produced by Arup. He observes, correctly, that the email appears to demonstrate a familiarity with the Building Regulations and the CWCT Standard as referred to above. However, it is plain that this email was sent in the context of discussions about Jarvis' obligations in relation to the remedial works given that they were only needed to resolve the installation problems which had led to the detachment of the original cladding panels. There is no sensible basis for a conclusion that this shows that Mr Jordat also had familiarity with an issue which was not even under discussion at that time, i.e. the possible fire safety risks associated with using ACM panels to replace the existing solid aluminium panels, let alone any fire safety risks associated with the use of PE core panels as opposed to FR core panels.
68. Mr King also refers to "email correspondence with Sebastien Ardaillou of Accor in November 2024" which, he says, indicates a "level of expertise available to" Essendi through Mr Ardaillou, as the then Essendi UK Health and Safety Manager. This, however, is a chain of correspondence in relation to the opening up works undertaken by Essendi to ascertain whether or not the cladding panels were solid aluminium or ACM in the context of what was – as will be seen - the lengthy prior correspondence between Essendi and LPC in that regard. It shows, as one would expect seven years post-Grenfell, both knowledge of and familiarity with building safety related issues at that point. It does not, however, in my view provide any assistance at all in terms of the knowledge which the equivalent person within Accor would have had about such matters at the time of the cladding contract.
69. It follows that, in the context of this case, it does not assist LPC to seek to hold Essendi responsible for the use of category 3 ACM cladding panels by contending, as it does - partially in reliance on observations of mine in an earlier judgment in Martlet Homes Ltd v Mulalley & Co Ltd [2022] EWHC 1813 (TCC) at [84] - that the use of category 3 ACM cladding panels was in fact non-compliant with requirement B4(1) of the Building Regulations 2000/2531. The same is true of the argument that the use of category 3 ACM cladding panels was non-compliant with section 13.7 of Approved Document B (2000 Edition Consolidated with 2000 and 2002 Amendments).
70. I thus do not accept LPC's essential submission that "from as early as January 2006 and again in early 2007, Essendi knew or must have known that the presence of Category 3 ACM on its hotels was problematic".

(ii) 2007: The original lease.

71. Returning to the chronology, on 3 April 2007 Essendi entered into a sale and leaseback agreement with an Isle of Man company, then known as Wembley Hotels Limited (now Britannia Heights Freehold Ltd) ("WHL"), under which WHL agreed to purchase the freehold of the Hotel for £12.95 million. The contemporaneous evidence shows that Essendi provided WHL with a number of documents relevant to the initial construction and the cladding contract, including the O&M Manual, as-built drawings and the Weatherwise contract documentation, which also included the letter of conformity provided by CGL.
72. There is a connection between WHL and LPC, in that both are part of the Criterion Capital group of companies and both appoint Criterion Capital Limited ('Criterion') as their UK agent. Mr Aziz has, or has had, a common interest in and control of both companies, albeit indirectly through family arrangements, which is what he said at the time of the transfer of the freehold from WHL to LPC: see section (iv) below.
73. Pursuant to the sale and leaseback agreement, on 25 June 2007 Essendi, as the new tenant, entered into a lease with WHL as its new landlord for a term of 12 years ending 24 June 2019 ("the original lease"). I will refer to the detailed terms of the original and the current lease in due course. For present purposes it suffices to note the following:
74. The rent payable to WHL was 22% of the gross turnover achieved by Essendi in each relevant 12-month period.
75. What was demised was "the premises", which included the whole building save for "all structural and load bearing walls and columns, roofs, foundations and substructure, floor slabs and ceiling slabs, external finishes and cladding, external doors and windows and door frames and window frames" (for shorthand "the structure and exterior"). The respective covenants, which were in broadly standard terms, to put and keep the demised and retained premises in good and substantial repair and condition followed this traditional demarcation line.
76. There was, however, specific provision made in relation to the cladding, which was defined by reference to the works undertaken by Weatherwise under the cladding contract. In short, a dividing line was drawn between the position up to and after what was defined as the "Cut Off Date" of 22 May 2017. Although the reason for choosing this date was not explained in the original lease, as Essendi submits it is fairly obvious that it was exactly 12 years from the date of the Weatherwise contract, after which time any claim which Essendi might wish to bring against Weatherwise for breach of the cladding contract (as a contract made under deed) would be limitation-barred.
77. The original lease imposed a number of notification and repairing obligations on Essendi in respect of the cladding up to the cut-off date, as well as giving them certain rights in relation to any cladding repairs which were not its responsibility under the original lease. Before the cut-off date, Essendi was essentially responsible for repairing any defects in the cladding and for indemnifying WHL in relation to the same, whereas after that WHL assumed liability. There is a lively debate as to the true interpretation of these provisions, which I shall defer until later. In short, however, as may be seen, what would otherwise have been WHL's full repairing responsibility for the cladding was carved out and transferred to Essendi up to the cut-off date.
78. The original lease also imposed respective covenants in relation to "legal obligations", which also followed the repair covenant demarcation line as regards the particular parts of the Hotel building. This is also the subject of a lively interpretation debate, because Essendi relies upon these clauses in relation to its allegation of breach in relation to the FSO. Again, I shall defer consideration of that question until later.
79. Given the repairing obligations undertaken by WHL, it is of note that there was no service charge provision, so that if and insofar as WHL had to undertake works to the structure and exterior of the Hotel building it would have no right to recover the cost from Essendi under the service charge. That, of course, provides the obvious commercial explanation why this case is so strongly contested in the way in which it has been. If the cost of replacing the category 3 ACM cladding panels could be fully recovered by LPC from Essendi via the service charge, doubtless the parties' respective positions would be very different, possibly entirely reversed.
80. Also of commercial significance was the right conferred on Essendi under Sch. 6 to serve notice to renew the original lease for three further periods of 12 years. Understandably, there was no equivalent cut-off date in these further leases as regards any cladding defects. Thus, Essendi had the right – subject to compliance with the relevant requirements of the original lease – to obtain a total of 48 years' worth of overall tenancy. WHL did not have an equivalent right to require Essendi to accept any such further leases. This is obviously a consequence of the fact that the original lease was granted as part of a sale and leaseback arrangement; although Essendi was selling the freehold to WHL it still wanted the security of long-term occupation rights to continue to trade the Hotel from the Hotel building.

(iii) Essendi's knowledge of fire safety risks from the use of category 3 ACM cladding panels from 2006 to 2017.

81. Mr Gray and Mr King agree, by reference to the findings of the Grenfell Inquiry, that: (a) a reasonably competent designer/architect should have known about the risks associated with the use of ACM cladding panels on high rise buildings before 2017; and (b) by 2017, there were many (including designers and manufacturers) who knew and had known for many years about the risks posed by ACM panels with unmodified polyethylene (PE) cores.
82. Mr King, however, also accepted in cross-examination that, whilst from 2006 onwards there was an increasing awareness among some designers and architects of the specific performance risks associated with the use of category 3 ACM panels on buildings, this was far from being universal, given that category 3 ACM panels were still being fitted to buildings as late as 2017.
83. These opinions are not, however, relevant to the question whether Essendi knew or – if relevant – should have known about such risks over the period from 2006 to the date of the Grenfell fire. If this were a professional negligence claim, or if there was some basis for contending that the knowledge which Essendi's professional advisers had or should have had should be imputed to Essendi, then they might have been relevant.
84. In his report Mr Van Gorp asserted that "from 2008 onwards … an international reputed hotel operator would have been aware of the potential risks of having combustible cladding". He suggested in cross-examination that this applied to Essendi because the health and safety department of an international organisation such as Accor should have been aware of façade fires in general and "therefore should have asked to check what the composition of the panels was at [the Hotel]". His opinion, as expressed in cross-examination, represents a considerable extension of his opinion in his report. His opinion in his report may well be right, insofar as it appears to be based on his reasoning that a hotel group operating internationally, with a health and safety department, would have had the means and the opportunity to acquire and disseminate knowledge about fires associated with combustible cladding worldwide, especially in high-rise buildings in the Middle-East. However, that is not an opinion which necessarily demonstrates that Essendi would have had such knowledge from 2008 onwards, still less that it "ought to have" checked what the ACM cladding at the Hotel building comprised. That appears to me to be an opinion based on no solid evidential support, also going beyond the scope of his expertise as a fire safety engineer.
85. As I have indicated, Essendi had a wide range of different hotels in a wide range of different countries, owned and managed by different regional companies. There is no evidence that Essendi had a significant health and safety department or that information in relation to the potential risks of category 3 ACM cladding panels was held by or shared between the different companies within the Accor group internationally. Ultimately, Mr Van Gorp agreed in cross-examination that his basis for making the statement in his report was his experience in working on construction projects with hotels, mainly in the Middle East, particularly those where his client's health and safety department had asked him, as a fire safety expert, to undertake a fire safety risk review. He also accepted that "nobody was routinely testing ACM on their buildings prior to Grenfell" or "remediating buildings that had ACM on them prior to Grenfell … by reason of the risk of the ACM". It also appeared that he was mistakenly operating under the belief that the O&M manuals specifically referred to the ACM panels having a PE core. In my judgment, his evidence provides no basis whatsoever for a conclusion that Essendi knew or ought to have known that the panels were made of category 3 ACM or of the particular fire safety risks associated with the use of the Reynobond cladding panels as fitted on the Hotel building before the occurrence of the Grenfell fire, and there is no other evidence to that effect.
86. In its submissions LPC also sought to rely on the evidence given to the Grenfell Inquiry, as referred to in the Phase 2 report at par. 49.1, to the effect that "knowledge of the dangers posed by the use of combustible materials was developing rapidly during that time, partly as the result of a series of fires in high-rise buildings in various countries whose external walls contained insulation made from organic materials and aluminium composite material rainscreen panels with a polyethylene core". However, even assuming that Mr Gray was right to accept that this was knowledge within the construction industry generally, rather than within the bodies giving guidance as referred to at par. 49.1 of the report, that still provides no basis for a submission that companies such as Essendi must also have had such knowledge pre-Grenfell. In my judgment, LPC cannot simply attempt to elide the distinction by pointing to the fact that Essendi has a construction department as well as a health and safety department.
87. Penultimately, LPC submitted that, regardless of anything else, by April 2017 Essendi "unarguably knew of the fire risk posed by the presence of Category 3 ACM" by reason of the content of a summary provided by an email to Essendi from an engineering consultancy known as Clarke Bond of a visual façade inspection carried out at the Ibis Ealing hotel on 13 April 2017. This summary, however, appears to have been provided in the context of works being carried out to the external building envelope of this hotel. It noted – amongst many other things - that there were some missing cladding panels and recorded that "after discussions on site with the site manager, we understand that replacements to ACM composite panels (STAC BOND) and insulation were carried out to ensure that materials used above 18m were in compliance with Approved Document B - Fire regulations i.e. the use of materials of limited combustibility …".
88. It did not, however, suggest that this particular point had been raised as a matter of previous concern or that it required any particular note or action from Essendi at that stage. Instead, it appears to have been simply a matter of observation. The email was passed on by its recipient to Mr de Menthiere and others. He explained in evidence that this related to a project to complete works for this particular hotel so that it was ready for Essendi to take a lease and to open it for business, where he was concerned both generally in relation to progress and specifically that damp ingress might be related to problems with the cladding. He said that he did not pay any particular attention to the reference to the ACM panels. In my judgment, this is not surprising since they were not flagged as being a potential cause of the damp ingress. There is no evidence that anything further was said or done in this respect before the cut-off date of 22 May 2017 under the original lease or the Grenfell fire occurring on 14 June 2017.
89. I accept that a careful reading of this summary by Mr de Menthiere and others would have made him aware that there was, in general terms, a need to ensure that ACM composite panels above 18m had to achieve a specified limited combustibility requirement in order to comply with this fire regulation. However, this does not, in my judgment, provide any support for a submission that it ought to have put him on notice of the need to ensure that Essendi undertook investigations into its other hotels, including the Hotel in particular, to see whether there was combustible cladding. Apart from anything else, as I have already noted, there is no evidence that anyone, either at the time of the cladding works or subsequently, had expressed any concern that the replacement cladding panels were not of limited combustibility or otherwise represented a fire safety risk.
90. In the context of this case, it is not possible in my judgment to say that this email ought to have alerted the relevant persons within Essendi of the need to undertake an urgent investigation into the replacement cladding to see whether the issue, briefly reported in relation to the Ealing Ibis, was potentially such an important and time-critical issue in relation to the Hotel such that before the cut-off date Essendi ought to have made those investigations and been alerted both to the fact that the core was made of flammable PE and that this presented a fire safety risk which meant that its notification and repairing / remedying obligations under the original lease were triggered. In reality, the prospect of anything concrete having become known to Essendi between 13 April and 22 May 2017 is extremely remote. Whilst the temporal coincidence between the two dates explains why LPC wishes to exploit it for forensic purposes, in my judgment it does not prove anything of real significance.
91. Finally, LPC seeks to rely upon Essendi's response to the Grenfell disaster on 14 June 2017 as demonstrating a previous knowledge and familiarity with the fire safety risks associated with the use of ACM. However, in my judgment all that the evidence about this shows is that: (a) by 23 June 2017, Essendi was able to confirm that the Hotel was clad in aluminium panels, which would in itself have been a straightforward task, and also able to appreciate they needed to obtain more detailed information from the O&M manuals as soon as possible; (b) by 26 June 2017, they had discovered – as may be assumed, from the O&M manuals – that it was a Reynobond aluminium composite material, but could not yet ascertain whether it was PE or FR core; (c) as at 29 June 2017, Essendi was waiting for the installer to confirm whether it was PE or FR core, but anticipating that it might be the former; (d) by 18 September 2017, Mr de Menthiere was able to share with Mr Hoadley – Mr Sell's predecessor as head of asset management at Criterion – the "hot topic" that the cladding was "inflammable polyethylene".
92. As to this last point, Mr de Menthiere was unable to explain in cross-examination how he had come to learn this. There is no documentary trail as to when and how this information was provided to him or to Essendi. The most likely explanation is that it was information provided by the installer. However, it is possible, given Essendi's general strategy of seeking to chivvy LPC into action in relation to the cladding, in circumstances where it strongly believed that: (a) it was LPC's responsibility; and (b) it needed to be dealt with as quickly as possible, that Mr de Menthiere did not actually know this as a positive fact, but simply suspected it and was seeking to push LPC into action. Regardless, I am satisfied that there is no basis for any finding either that Essendi knew more than these contemporaneous documents reveal, or that it knew the position earlier but sat on the information because it was aware of the significance of the cut-off date. Finally, although LPC also criticises Essendi for not taking any action to confirm the position by testing, it is to be noted that in November 2017 Mr de Menthiere was chasing Mr Hoadley for news about the cladding investigation and seeking an action plan, and in December 2017 Mr Hoadley confirmed that he believed the testing had been commissioned, so that in my view there is no substance in that criticism.
93. In conclusion, in my judgment none of the matters relied upon by LPC establish that Essendi was – or should have been - aware before the cut-off date of 22 May 2017 that the cladding panels "were unfit for the use for which they were intended and posed a risk to the health and safety of guests at / visitors to / employees at / neighbours in the immediate vicinity of the Building".

(iv) LPC's acquisition of the freehold of the Hotel and the entry into the current lease.

94. LPC acquired the reversionary interest in the Hotel building from WHL on 3 April 2018 at a cost of £22.8 million with the benefit of commercial funding. At the time, Mr Aziz explained that this was "an asset transfer between two Aziz family-owned companies at market value".
95. At around the same time, the adjacent office block, Mahatma Gandhi House, was demolished, leaving the western elevation of the Hotel up to level 10 (which was where the adjacent block had reached) exposed and unclad. In due course a new residential block, known as Williamson Heights, was erected in its place. This is owned and operated by a housing association, Peabody Trust, to provide residential flat accommodation for its tenants. It was built higher than the previous structure – up to level 12 - but a little further away, leaving a greater gap between the two structures of some 50 cm, compared with the previous 20 cm. Because the previous structure was not a party wall, there was no basis for LPC to demand that the now exposed section should be clad by Peabody or at its expense.
96. However, LPC did not undertake any works to replace the flashing which formerly provided protection to the exposed western flank, which is a separate element of this claim, albeit modest in comparison to the principal claim, which I will need to address briefly in due course.
97. On 12 June 2018, Essendi gave notice of its wish to exercise its right under the original lease to call for a further lease of the premises at the end of the term. After some resistance from LPC and, ultimately, the issue of proceedings, LPC accepted that it was obliged to do so and the current lease was entered into on 11 March 2019. As provided for under the terms of the original lease, the current lease is in substantially the same terms as the original lease save that the carve-out provisions in relation to the cladding are not carried over into the new lease – notwithstanding LPC's stated wish at the time – optimistic, it must be said - that Essendi agree that some equivalent provision should be included in the further lease.

(v) Investigations into the cladding post-Grenfell.

98. Both in the written opening submissions and at trial, considerable attention was placed upon the history of the respective investigations undertaken by Essendi and by WHL and then LPC in relation to the cladding. Whilst these events are of some relevance to the interpretation of the current lease, it is not necessary for me to delve into the details of these investigations. That is because the detail is largely irrelevant to the issues which arise in the case, in that: (a) matters post-dating the cut-off date under the original lease are not relevant to LPC's case in relation to its claims under the cladding related provisions of the original lease; (b) whether or not WHL and then LPC acted with sufficient diligence or enthusiasm to follow up the indications in the reports it obtained of the risk that the cladding panels might be category 3 ACM is largely irrelevant to Essendi's claims under the current lease. That is because, as will be seen, on any view LPC was placed on notice by Essendi in late 2024 that they were comprised of a category 3 ACM core and, since then, has resolutely refused to accept that it is under any obligation to remove or replace the cladding panels, even after the joint expert inspection in October 2025 effectively confirmed that this was the case.
99. Nonetheless, and insofar as these matters are of some relevance, I can summarise the position and my conclusions briefly as follows.
100. As regards WHL, in November 2017, Criterion instructed a firm known as Malcolm Hollis ("Hollis") to undertake a desktop survey. In December 2017 Hollis communicated its concern that the cladding was "a Reynobond 4 mm composite panel with a polyethylene core similar to that used on Grenfell Tower". This appears to have been based on information provided by CGL as the original supplier.
101. Hollis also referred to the Department for Communities and Local Government ("DCLG") having undertaken a fire test on a similar mock-up system and the wall system having failed the test. Therefore, said Hollis, the DCLG conclude that "wall systems with these materials… present a significant fire hazard on buildings over 18m". The current course of action was recommended as follows: "(a) notify Fire and Rescue Service of potential risk and agree any interim measures with them; (b) appoint chartered fire engineer to consider options and advise further; (c) put in place a plan to review the cladding system and undertake remedial work. (This may involve removal and replacement)".
102. This advice was consistent with the content of Information Note 1 produced by DCLG on 11 December 2017, provided for the attention of "anyone responsible for residential buildings over 18m in height with Aluminium Composite Material (ACM) cladding, who is concerned about the fire safety implications for those buildings".
103. This clear warning and recommendation resulted in Criterion instructing Clarke Banks, a well-known fire engineering consultancy, to investigate further. This instruction appears to have been on behalf of LPC which, by then, was interested in acquiring the freehold of the Hotel building. Clarke Banks' initial response was to confirm that it appeared that what Hollis had reported was the case and, if so, being category 3 ACM, it would fail a fire test. They recommended that "a small fire test be carried out on a removed sample of the cladding which will determine if the ACM on Ibis Hotel is category 2 or 3".
104. What then happened is something of a mystery. In short, samples were taken by someone, but not by Clarke Banks, after which Clarke Banks concluded, on the basis of what it appears to have seen, that the aluminium panels on the building were pure aluminium and would achieve category A1 non-combustible status. It cannot be ascertained from the available information - in particular, given the death of Mr Burfitt and the absence of any clear documentary trail - whether this was someone positively misleading Clarke Banks by providing it with a sample which could not have come from the Hotel building, or an inexplicable error by Clarke Banks (inexplicable, because any cutting open of a sample panel would have revealed immediately that it was ACM rather than solid aluminium, even though a fire test would have been needed to confirm if it had a PE or FR core), or some other unexplained reason. What is clear from the full testing process undertaken in October 2025 is that in fact it is the case, as originally suspected, that composite category 3 ACM cladding panels are present throughout the Hotel building, with no exceptions which have ever been found.
105. The Clarke Banks report then went through several iterations at the request of Criterion, intended to achieve the objective of getting it to remove the caveats contained in the first version which still, presciently, recommended additional sampling to confirm the position. With Criterion having succeeded in this objective, Hollis then updated its report to reflect the content of Clarke Banks' final version report. None of this was communicated to Essendi, which was only provided with the final version of the Clarke Banks report dated 9 March 2018. This stated:

"According to the recent cladding sample provided by the client it was established that the cladding panel installed on the face of Ibis Hotel is only constructed of aluminium sheet and does not consist of a combustible insulation core. This cladding panel would satisfy the external surface for walls as recommended within ADB Section 12.6 described. … Subsequently it has been confirmed (by client sampling) that the inspection sample represents the same make up across the whole of building façade."

106. No further investigations were undertaken by either party before the entry into the current lease on 11 March 2019.
107. At around the time of entry into the current lease Essendi instructed its own consultants, the Hook Consultancy, to undertake an external condition survey of the cladding. In May 2019 it produced a report which identified no significant apparent defects. It does not appear that the author was even made aware of the 2006 recladding works. As regards the composition of the cladding panels, it simply reported the conclusions of the Clarke Banks report, concluding: "It can therefore be considered that the cladding, i.e. the rain screen facade system is, from a fire propagation consideration, compliant with the standards in force at the time of construction". The same happened in 2020 when Essendi instructed another consultant, WJE, to audit the external wall structures on its portfolio of hotels.
108. In the meantime, in November 2019, LPC instructed another consultancy, Clevetts, in relation to a separate issue, but who reported in January 2020 querying the Clarke Banks report on the basis that the as-seen detail on the Hotel would normally only be associated with an ACM panel and that it was not apparent whether Clarke Banks had actually inspected the samples or undertaken the tests. Clevetts recommended that a further sample be taken from the area they had identified and the position confirmed. This would have been very straightforward for LPC to do. However, Mr Sell was reluctant to do so, for reasons which he was not able to explain convincingly to me at least, and it was not done. Nor did Mr Sell inform Essendi of the concerns raised by Clevetts. This point was also picked up by the valuers, Savills, in 2021, who were instructed to produce a valuation for LPC, but yet again no action was taken and the concerns which Savills raised were dismissed by Mr Sell.
109. In conclusion, there is no evidence to suggest any knowledge on Essendi's part of the true position. Instead, it was positively reassured by LPC that there was no problem because the panels were made of solid aluminium. On the available evidence, there is insufficient material for me to make a positive finding of deliberate concealment by LPC. However, it is clear from the evidence that: (a) LPC was keen to squash any suggestion that the panels were – or even might be - made of anything other than solid aluminium; (b) LPC displayed a firm reluctance to have any further invasive investigations undertaken by any independent consultants. That is equally consistent with LPC not actually knowing but, having achieved a favourable report from Clarke Banks, not wishing to do anything which might cause that conclusion to be questioned, presumably because it knew that if it was anyone's responsibility to resolve it would be LPC's, with no financial recourse from Essendi.

(vi) The notifications by Essendi and LPC's response.

110. Despite LPC's reassurances, it is clear that Essendi was not fully convinced of the position. By letter dated 3 January 2024, Essendi formally notified LPC of various alleged breaches of covenant and required it to remedy them. These included that the cladding was not in good and substantial repair and condition, and that LPC had not ensured that it had complied with fire safety and health and safety regulations, referring to the need to carry out an invasive survey as identified by Clarke Banks and to conduct a fire risk assessment external wall survey to assess the risk posed by the aluminium cladding and then to act on any issues and recommendations without delay. It stated that, if this was not done by 5 February 2024, it would do so itself and deduct the costs from the rent payable under the lease (as it was entitled to do under clause 4.3.4).
111. There was no response at all to that letter, and Essendi proceeded to instruct a firm known as LMA Architects to review the Clarke Banks report and to confirm or otherwise the presence of ACM. On 6 August 2024, Essendi through its solicitors notified LPC that, in the absence of a reply within 14 days, it would undertake its own invasive survey of the cladding. In the absence of a substantive response, despite assurances, Essendi proceeded to do just that.
112. On 12 November 2024, Essendi obtained and provided LPC with a copy of a report from LMA Architects, which concluded that the cladding comprised ACM panels with no evidence of cavity barriers in three of the four locations surveyed.
113. On 18 December 2024, Essendi provided LPC with a short report from fire specialists, WarringtonFire, which concluded that the cladding core had no flame-retardant properties.
114. On 20 December 2024, Essendi obtained a detailed report from Hydrock fire engineers which: (a) confirmed that the cladding was category 3 ACM; and (b) advised that the cladding panels required removal and replacement.
115. At the same time, Essendi formally notified both the Ministry of Housing, Communities and Local Government ("MHCLG") and the London Fire Brigade ("LFB") of these findings.
116. LPC's response was to instruct Ms Sharma's company on or around 19 December 2024 to assist in dealing with these matters. Whilst she explained in her witness statement and oral evidence that she had experience in fire safety matters, she is not a fire safety engineer or a high-rise building cladding specialist and her company had previously been appointed by Criterion to act as CDM and Health and Safety Advisers in relation to the Hotel. Mr Sell explained that Ms Sharma was appointed because Mr Burfitt was already off work due to his illness. Whilst that appears understandable, what remains unclear – and unexplained by LPC – is why it did not also immediately instruct fire safety engineers to investigate and advise as a matter of urgency, given the obvious urgency and importance of the matter, and given that Ms Sharma or her company could not have performed this role.
117. Indeed, it is clear from Ms Sharma's evidence that in reality no concrete steps were taken by LPC to investigate matters before - or indeed after - 28 January 2025, when Essendi's solicitors sent a formal and detailed letter before action to LPC, enclosing the Hydrock report and requiring it to confirm by 12 February 2025 that it would replace the cladding on the Hotel building promptly at its cost, failing which it would issue proceedings and seek an expedited determination. Instead, when LPC's solicitors finally sent a substantive response on 3 March 2025, apart from making complaints about a failure to provide wide-ranging (and, in my view, wholly disproportionate) pre-action disclosure, LPC denied liability by reference (amongst other things) to its case that Essendi was aware of and had concealed its installation of the ACM cladding and was itself responsible for complying with the obligations under the Fire Safety Order (FSO).
118. In the meantime, Essendi had also taken advice from Mr Hourqueig, a fire engineer from a consultancy known as Studio Fahrenheit which Essendi had regularly used to provide fire safety advice in relation to various of its hotels. I shall refer to this in some detail, because of the weight attached to it by LPC as regards the later closure decision.
119. Mr Hourqueig attended a meeting held on 31 January 2025 at which Mr Van Der Graaf and his fellow director of Essendi were also present. The minutes record that Essendi was "keen to have a better understanding of the practical/operational risks involved in the continued operation of the property as a hotel including (i) a better understanding of the nature of the current risk, especially to guests, employees, visitors and others using the hotel, (ii) how the fire risk could be further mitigated over and above current steps and (iii) whether they should consider closure of the hotel even with all possible risk mitigations in effect".
120. Mr Hourqueig referred to the "extensive list of fire mitigations" already in place, as a result of which "he felt that the fire and life safety risk level for persons within the building was acceptable, and he was not unduly worried". However, he expressed more significant concerns about the potential for rapid external spread of a façade fire and the radiated heat it could generate, which might adversely affect the adjacent residential building and the Holiday Inn hotel across the car park, by potentially igniting fires in both buildings" which, he believed, "could be a separate cause for closing the hotel [and] felt that there was a significantly higher threat to life from external fire spread in neighbouring properties than to occupiers of the hotel itself". He "felt that the management should keep the possibility of closure of the hotel under review given the risks he had identified", recommended further mitigation measures, and recommended that the existing fire risk assessment ("FRAT") be updated and shared with the fire authority. It was agreed that any decision about the continued operation of the hotel was deferred until the time for LPC to respond.
121. On 13 February 2025, in the absence of a substantive response from LPC, he provided as agreed a written report which confirmed the points already addressed in the meeting and which included the recommendation that the existing ACM panels should be removed and replaced by LPC as soon as possible and that "failing to receive an action plan from the owner within 1-month time, I recommend that [Essendi] vacate the building and remove their logos from the facades".
122. Although LPC relies on this as advice that the Hotel did not need to be closed, it is obvious that this advice was strictly time-qualified, and that the corollary was that in the absence of a rapid promise of removal and replacement from LPC the Hotel should be closed.
123. It is also obvious from this advice, consistent with later advice from Mr Hourqueig, that there was a concern about reputational damage to Essendi as well as a concern about the direct risks of any fire spread due to the presence of the category 3 ACM cladding panels. That reputational concern was entirely understandable and, in my view, cannot be discounted as irrelevant to the reasonableness of Essendi's subsequent decisions and actions.
124. Essendi duly obtained a formal updated FRAT from Hydrock. This identified the risk posed by the external wall as "high due to the presence of ACM category 3 cladding" and "exacerbated by the adjacent residential building in close proximity to the west elevation". It noted, however, that several mitigation measures had been implemented and were being arranged by Essendi to address this high risk. It stated "Given these mitigations, we have deemed the holistic risk to be MODERATE, BORDERING ON SUBSTANTIAL, with further steps required to reduce it to a MID-MODERATE LEVEL. The removal of ACM cladding is crucial in lowering the risk rating, though we acknowledge that this will require both time and financial investment". It stressed however that "some of the measures above, particularly the adjustments to the fire alarm system are temporary and should not be relied upon as a long-term solution". Thus, whilst as LPC notes, Hydrock did not advise or recommend that the hotel required immediate closure, equally it did not advise that the Hotel could remain open indefinitely with the category 3 ACM cladding panels in place.

(vii) The issue of proceedings and the closure decision.

125. The claim was issued on 5 March 2025, two days after the response from LPC's solicitors.
126. LPC complains that Essendi continued to seek to involve the MHCLG and the LFB with a view to encouraging them into taking action under the FSO which would require LPC immediately to remove the category 3 ACM panels. That failed to achieve the desired objective. However, on 7 May 2025 the LFB did send LPC a Notification of Fire Safety Deficiencies ("the Fire Safety Deficiencies Notification").
127. This identified matters which, in the LFB's view, required addressing in order to comply with the FSO. It alleged a breach of Art. 11 of the FSO on the basis that "at the time of the audit your preventative and protective measures had not been planned, organised, controlled, monitored or reviewed where required. It was found that remediation of the category 3 ACM cladding had not been planned or organised by London Property Company Limited who are the landlord and responsible person for the building's exterior". It recommended that action should be taken by 6 May 2026 (i.e. within 12 months). It made clear that this was without prejudice to any legal action which might subsequently be taken in relation to any failures to comply with the FSO.
128. LPC notes, as is plainly the case, that the LFB did not send a formal notice of Alterations, Enforcement, nor Prohibition under the FSO, which were measures that it could have taken and which Essendi was urging it to take. I have been referred to the Guidance issued by the Home Office in September 2023, which states that Fire Safety Deficiencies Notifications may be issued "where there are more significant breaches but, nevertheless, these are unlikely to place occupants of the building at serious risk".
129. However, LPC cannot escape the point that the LFB's clear view was that LPC needed to remediate the category 3 ACM cladding, albeit that it was given a generous time period to do so. The generous time period may, as LPC has alleged, reflect an appreciation that it would take some considerable time to plan such works, to apply for and obtain the requisite planning permissions and other approvals, and then to procure and undertake the works.
130. The immediate context for the closure decision is that, following service of the Defence and Counterclaim by LPC (from which it was apparent that no admissions would be made and that the case would seemingly be fully defended on all issues), the case was listed for a first case management conference before Constable J on 4 July 2025. The claim had been issued in the Shorter Trials Scheme, which always seemed ambitious given the likely range of disputed matters. LPC had objected to this and – albeit only shortly before the case management conference - had issued an application to transfer it out of that Scheme. On 26 June 2025 Essendi had cross-applied for an order for an expedited trial.
131. It was to be expected in such circumstances that the parties would need to come to the hearing already prepared ready to identify the expert witnesses which they proposed to seek permission to instruct in the case. It is thus not surprising, in my view, that on 10 June 2025, Essendi's solicitors wrote to Mr Bullock, following what must have been some previous contact to ascertain whether he would be willing to accept instructions, asking him to provide a fire engineering report.
132. What is, perhaps, a little unusual is that he was instructed at that point to provide a "'bespoke' fire engineering report which considers the safety of the hotel by reference to the requirements in the FSO and our questions set out in the schedule to this letter" but not, at this stage, as an expert producing a report to the court which would, therefore, have to comply with the requirements of CPR Part 35. He was asked to attend a site inspection as soon as possible and also to provide his "preliminary thoughts", if possible, in advance of the case management conference.
133. It is not explained why he was being instructed in this way. There are a number of possible explanations. One obvious explanation in my view is that Essendi wanted to know what his provisional opinion might be before it committed itself to instruct him as its Part 35 expert. Another, connected, reason was that Essendi wished in any event and in advance of any Part 35 report, to obtain a second opinion as a cross-check against that of Mr Hourqueig from Mr Bullock, who clearly has a substantial reputation and expertise in fire safety related matters and had not previously been instructed by Essendi on other matters, in relation to an assessment of the fire safety risk by reference to the FSO and the need for any further remedial measures as well as what degree of urgency was required for taking such measures in the light of his assessment of fire risk.
134. These reasons seem to me to be far more likely than LPC's submission that he was being specifically asked to provide input to assist in the application for expedition. That is because: (a) such a purpose is not apparent from the letter or the accompanying schedule; (b) that being his understanding of the purpose for his instructions was not supported by his evidence in cross-examination, contrary to the assertion by LPC in its closing submissions. Nor does either the letter or the schedule ask for his specific opinion as to whether or not the Hotel could remain open pending the removal or replacement of the category 3 ACM cladding panels and, if so, for how long. I am prepared to accept that Essendi's external lawyers may well have anticipated referring to his opinion as to the degree of urgency required in order to support its argument for expedition, should his opinion be that it was urgent. However, so far as I have been informed, it is not said that his opinions on this point were disclosed to LPC's lawyers or put before the court at the hearing on 4 July 2025.
135. On 24 June 2025 Mr Bullock provided a short letter containing his initial opinion in advance of the expert report. As he said in his letter and in evidence, at that stage he had not inspected the Hotel building nor had he been able to do anything more than carry out an initial review of the voluminous documents provided to him. His "considered initial opinion" was that the removal of the category 3 ACM cladding "should be undertaken as soon as practicably possible and that this process should not be delayed for reasons other than mobilisation of the design and contracting resources necessary". He did not say anything about whether or not the Hotel should or should not be closed in the meantime.
136. He attached a copy of his CV, which made clear that he had considerable experience and expertise in the fire safety field, with the results of his research being incorporated into published standards and guidance documents, including PAS 9980. I say this only because it is relevant to the weight which Essendi was reasonably entitled to place on his opinion at the time in relation to the closure of the hotel.
137. On 26 June 2025 Mr Ardaillou emailed various persons to report the results of his discussions with Mr Hourqueig with a view to updating the letter of advice provided on 13 February 2025 (see above). What is relevant is Mr Hourqueig's reported view in relation to considering closure in the event of Essendi not having received an action plan from LPC within a month which, of course, had not happened since Mr Hourqueig had been last involved. In short, Mr Hourqueig was concerned about the fire safety risks of the Hotel being closed as well as being left open and believed that the Hotel's fire safety strategy helped mitigate the fire risk so long as it was managed and reviewed. However, he was also concerned about the reputational risk in the event of a fire involving the category 3 ACM cladding, even without fatalities. On 30 June 2025, Mr Hourqueig provided some further comments to Mr Ardaillou to support a decision not to close the Hotel.
138. As stated, on 4 July 2025, the case management conference took place and Constable J directed that the trial should be listed for February or March 2026 to deal with liability only.
139. In my judgment, the circumstances in which the closure decision was taken ought reasonably to take into account that, whilst Essendi had succeeded in persuading the case managing judge that the trial should take place within 9 months, first, there would inevitably be a delay in a judgment being produced and second, assuming that Essendi was successful, the court would have to set a timetable for LPC to comply with any order for specific performance. In short, and leaving aside the inevitable risks of other delays, there could be no guarantee whatsoever that the category 3 ACM cladding panels would be removed within 12 months of July 2025.
140. It was in those circumstances that on 17 July 2025 Mr Bullock sent a lengthy email to Essendi's solicitors, referring to his recent site visit and answering the question asked of him "whether the current measures in place are sufficient to ensure that the hotel is safe to continue operating" in the following way: (i) first, he identified the positive risk mitigation measures already in place by reference to Mr Hourqueig's report of 13 February 2025 (which he had clearly thus seen and read); (ii) second, he echoed Mr Hourqueig's view in that report that these measures did not justify tolerating the risk from the category 3 ACM beyond the short term and, if it was not removed in the short term, the Hotel should be vacated; (iii) third, he made the obvious – but important – point that "risk is a combination of probability of a hazard occurring and the consequence of that hazard should it occur"; (iv) fourth, he identified continuing possible causes of ignition of the category 3 ACM cladding panels both from external sources and from a significant fire in a hotel bedroom spreading through the window or through the vent above; and (v) thus, he "would not consider that current measures are sufficient that the building can continue to operate as a hotel indefinitely until such time as the ACM is eventually removed". He identified additional measures to reduce risk, such as localised ACM cladding removal, automatic sprinkler protection, and upgrading the room windows, but also noted the significant works required and that even then the possible consequences from the ignition of the category 3 ACM would remain high so that safety could not be "ensured". He noted that there was no plan for removal of the category 3 ACM cladding panels in the short term and noted that the possible consequences of a fire involving category 3 ACM cladding panels were extremely serious. He stated that, in his view, there would be no reasonable defence for continued operation as a hotel^[3]. His final conclusion was that "in my professional opinion the hotel should close until the ACM cladding is removed".
141. On 24 July 2025 both Mr Bullock and Mr Hourqueig attended a pre-arranged meeting at 10 am at which in-house and legal representatives were present as well as the two directors of Essendi (Mr Van Der Graaf and Ms Neubert), Mr Carr and Mr Ardaillou. The minutes record that "the main purpose of the call was to have an open discussion about Romain and Mostyn's advice regarding whether the Hotel is to remain open given the presence of Category 3 ACM cladding on the building's façade, and to discuss any further mitigating factors that would allow Essendi to continue operating as a hotel. All attendees to the call had seen both Mostyn's and Romain's differing advice on this matter".
142. The minutes record that both experts provided their views. Mr Bullock repeated his views. One of the internal lawyers stated that the possibilities of further mitigations needed to be explored and this was discussed by Mr Bullock, Mr Hourqueig and Mr Ardaillou as regards the practicalities of the options for preventing fire spread through the hotel room windows and vents. It appears that there were differences of view in this regard. However, Mr Hourqueig acknowledged that "zero risk does not exist" and a high-level fire involving the category 3 ACM would be difficult for the fire brigade to extinguish.
143. Mr Hourqueig expressed the view that "vacating the building now was a hard decision to take and if we are comfortable enough that works are agreed and taking place with the landlord within the coming 12 months then he would support the hotel remaining open". He said that "in worst-case conditions, ACM could be removed in 12 months, but the full process might take up to 26 months". After a further discussion on mitigation measures Mr Bullock repeated his view that the risk of ignition could be reduced but not the consequences, especially given the risk profile of vacating sleeping and quite possibly intoxicated guests from a hotel such as the present.
144. Matters were left on the basis that Mr Ardaillou and Mr Carr were to review any additional mitigation measures in relation to the windows, vents and otherwise and Essendi was to make a decision on closure as well as the valuation of cost and practicality of removing the cladding and the likely loss of profits from closure.
145. There is no documentary or other evidence which indicates that there was any further discussion in relation to additional mitigation measures, save that the external windows to the hotel rooms were closed. In an email sent later that day to the hotel manager Mr Ardaillou explained that this would not adversely affect the amount of fresh air entering the room, because this was provided by vents, and that he was looking into installing a damper to seal the vents in the event of fire and to protect it to prevent its removal. There is no evidence that this was taken forwards before the actual closure decision. Mr Carr gave evidence that he was informed that these works could only be done externally and, thus, would require the consent of the landlord. This may be what Mr Van Der Graaf was referring to when he suggested in cross-examination that this was looked at. However, he also said that these further mitigation measures were discounted on the basis of the strength of Mr Bullock's opinion. This seems to me to be the most likely explanation, especially since the question of mitigation measures had already been considered in detail at the meeting, including in relation to the windows and the vents, and it was fairly clear that neither expert had been able to identify any measures which would make a sufficient difference at the meeting itself, so that it was inherently unlikely that the two Essendi employees would be able to do so.
146. Nor is there any documentary or other evidence that any detailed investigation was undertaken into comparative costs or the practicalities of category 3 ACM removal. An indicative costing was obtained from a contractor for the replacement of the ACM system with solid aluminium panels and associated works. Under cross-examination Mr Van Der Graaf said that "For us, at this stage, the most important one was health and safety. We were putting the life of our guests and our staff at risk here, so for us it was the main concern. And at that stage it was not the profit of the hotel". Again, it seems most likely to me that at that point it was clear in the face of Mr Bullock's advice that a decision not to close the Hotel based on comparative costs could not be justified in the face of the risk of a potentially catastrophic fire and the associated risk of criminal prosecution. The reality was that it was now for Essendi to make its decision based on whether they were prepared to follow Mr Bullock's advice, however reluctantly, or follow Mr Hourqueig's advice and let matters run for another 12 months and take the risk.
147. In a further email to Essendi's solicitors, sent in the early hours of 28 July 2025, Mr Bullock stated that in his opinion the current and proposed measures were not adequate to ensure that the risk of staying open was tolerable, including in his reasons the size of the building, the nature of the sleeping risk occupancy (i.e. the difficulties of prompt evacuation in the event of a fire when the hotel is full of guests, many under the influence of drink or other substances) and the extent of the category 3 ACM cladding and the risks of ignition. This was substantially repeated in a formal letter providing his initial advice dated 29 July 2025.
148. The email was circulated internally within Essendi on the morning of 28 July 2025, on the basis that Essendi had asked Mr Bullock to clarify whether the discussion about further remediation of risks might affect his advice in relation to closure, and he had confirmed that it did not. Reference was made to a call scheduled to take place at 12:00 hrs to discuss these matters. A later email that day indicates that in the call "the directors are now seriously considering a wind down and closure of Ibis Wembley due to an updated expert report on the cladding fire risks".
149. It seems to me most likely that this was the position as reached at that call between Mr Van Der Graaf and Ms Neubert with the in-house lawyers present. In accordance with Mr Van Der Graaf's evidence, there was a further Teams meeting between the two directors and Mr Clavié (as their immediate superior within the Essendi organisation) later that day at which the final decision was made. I accept Mr Van Der Graaf's evidence that he and Ms Neubert were working on the basis that the closure decision would not take place immediately and would require some preparation, but that Mr Clavié persuaded them to close the hotel almost immediately, on the basis that he did not want them to take the personal risk of prosecution as directors of Essendi if a fire were to occur in the period of any delay. Hence, I accept, the decision was taken to close with effect from 29 July 2025. On that day Essendi's solicitors wrote to both the LFB and LPC's solicitors, in the case of the former seeking to persuade them to issue a prohibition order against LPC, and in the case of the latter stating that on the basis of Mr Bullock's advice the decision to close the Hotel from that evening had been taken.
150. It has been pleaded and argued by LPC that "it may be inferred that the decision taken by the Claimant was taken in bad faith and was not caused by the presence of Category 3 ACM panels but was motivated by other factors, including works as to lifts". The decision to plead and maintain the pleading of this as a positive case, even after LPC had received primary and secondary disclosure from Essendi, seems to me to illustrate the remarkable level of dislike and distrust which Mr Aziz and Mr Sell – as I infer the persons giving instructions to this effect – have had for Essendi and its motives. As tellingly answered by Mr Carr in cross-examination, the idea that Essendi would choose to close the Hotel completely simply to install replacement lifts, which it had already planned to do and would typically have done in sequence so as to avoid the need for closure, is wholly implausible.
151. Finally, LPC has sought to persuade the Court that the way in which Essendi has acted in relation to the Hotel is very different from the way in which it has acted in relation to other hotels. That exercise has focussed in particular on the Ibis Hounslow. I am prepared to accept that Essendi has indeed taken a different approach to the Hotel than to the other hotels where it is undoubtedly liable for the cost of recladding works. It is fairly obvious that Essendi has been very keen to push this case forwards because it believes that the removal of the category 3 ACM cladding panels and their replacement is a "no cost" option for it. Nonetheless, in my judgment the evidence comes nowhere near establishing a contention that this differential treatment establishes that in deciding to close the Hotel Essendi was acting in bad faith or otherwise in a way which was not genuinely based on the advice which it had received from Mr Bullock.
152. In particular, given that there is no evidence that there has been actual or contemplated litigation by Essendi against landlords of other hotels in relation to any fire safety issues at those hotels, the two reasons why Essendi instructed Mr Bullock in this case and not in any others are in my view: (a) first, that it wanted a second opinion to confirm or otherwise what it was being told by Mr Hourqueig; and (b) second, because it would need a CPR Part 35 compliant expert report from an independent fire safety engineer, which would be potentially difficult for Mr Hourqueig to provide given his existing involvement with the Hotel and with Essendi generally. Further, it seems to me to be reasonably obvious from the initial instructions to Mr Bullock and from the subsequent further exchanges and meetings and discussions that Essendi had not expected to be told that it would, in Mr Bullock's opinion, have to close the Hotel immediately. That is apparent from the fact that it required a fair amount of persuading before it was prepared to take that advice. That in my view is perfectly understandable. No sensible business would choose to cut off a valuable source of business with no guarantee of recovery of its loss unless it felt it had no reasonable alternative.
153. That concludes my review of the relevant chronology.

E. The first core issue: does the cladding require replacement and if so why and in what timeframe?

154. So far as I have been able to ascertain, LPC has not pleaded or advanced in opening or closing submissions any positive case as to whether, on an objective basis, the category 3 ACM cladding panels require removal for fire safety reasons. It has, of course, pleaded and advanced a number of positive cases as to why it is not liable to remove the panels under the terms of the original lease, including – if relevant - the terms of the FSO through the legal obligations clause, but not that removal is simply not required. In its open offer letter to Essendi dated 16 January 2026 it offered to remove and replace the existing cladding at its own expense but on the basis that "should the Court later find that our client was not required to carry out the Remedial Works either in full or in part, your client will reimburse our client for the costs of having carried out such work unnecessarily". However, this was on the stated basis that "it is clearly in both parties' economic interests that the Building is remediated", rather than on the basis of any acceptance that from a fire safety point of view the category 3 ACM cladding panels required replacement.
155. It is a matter of some surprise that LPC remained either unwilling or unable even by the end of the trial to commit to a position one way or another.
156. It may be that the answer appears from the opinion of its own fire safety expert, Mr Van Gorp, which I infer has placed LPC in some difficulty in answering the question in the way in which it might have liked. This, therefore, is a sensible place to begin, starting with the fire safety experts' joint statement.
157. Under issue 4 they considered the issue: "If the Building is currently clad in 'Category 3' ACM panels^[4] what specific fire risks do they pose in the context of the Building's overall design, height, use and existing fire safety measures?"
158. Their agreed answer was as follows: "The experts have each carried out their own assessment of the current as-built situation with existing fire safety measures in place. The experts agree that, when applying the principles of PAS 9980 the as-built external wall construction presents an intolerable risk when considering the Building's overall design, height, use and existing fire safety measures".
159. Mr Van Gorp added: "There are however many positive risk contributors in the PAS 9980 assessment which, with adequate emergency response planning and additional safety measures, could result in adequate evacuation in case of a façade fire. I refer to an initial assessment that has been made demonstrating that the available safe egress time could be more than the required safe egress time. Note that the initial assessment is considering impaired (under the influence of alcohol) occupants. The adequate emergency response planning and additional safety measures could serve as temporary actions until the external wall upgrading works are completed".
160. The fire safety experts had already considered the issue: "May the 'code of practice' set out in PAS 9980:2022 be used (including by analogy, if appropriate) to assess the fire safety risks of a hotel building?"
161. Their agreed answer was: "Yes. Page V of the Foreword to PAS 9980 says: "While future revisions of this PAS might include a broader range of residential buildings, the scope of this first version is limited, as described in clause 1, primarily to multistorey blocks of flats. Nevertheless, the principles of the methodology set out in this PAS can be applied to a broader range of building types, including non-residential buildings, subject to appropriate use of the guidance and cognizance of the differences between such other buildings and multistorey, multi-occupied residential buildings".
162. Issue 12 asked them to consider: "Could the Hotel have been kept open and operated safely once the presence and extent of 'category 3 ACM cladding was identified in the external wall structure?"
163. The agreed answer was: "No (see Issue 4 above). The experts agree that this question does not refer to the provision of additional fire safety measures that could be taken to reduce the risk. The experts comment on that in Issue 13 below.
164. Under issue 13 they were asked to consider: "What additional risk mitigation measures could have been provided to keep the hotel open?".
165. They disagreed on this issue.
166. Mr Bullock's opinion was as follows: "Prior to its current closure, the hotel has already implemented practicable measures to reduce risk. My opinion is that the risk remained intolerable with those measures as they would not sufficiently reduce the risk. I consider that other measures which could have been taken such as replacing windows with fire resisting glazing, installing fire resisting vents from each guest bedroom and locally removing ACM cladding from directly above fire escape final exits would have reduced the probability of a fire impinging on the ACM, would have reduced the probability of a fire involving the ACM entering guest bedrooms, and would have reduced the probability of fire escape routes being compromised. However, it is my opinion that these additional measures would have been no more practicable in terms of cost and time-frame than removing the ACM cladding. Whilst it is conceivable that additional measures such as these could reduce the risk determined by a Fire Engineer from intolerable to otherwise high/substantial, the matter of how hotel guests would perceive the risk should not be overlooked. It is my opinion that if hotel guests were aware that the hotel is nearly fully clad in the same type of ACM cladding used at Grenfell Tower, then that would not only influence their decision to stay at the hotel but could also lead to negative consequences (such as panic) in a fire emergency, fire safety alert or false alarm situation".
167. Mr Van Gorp's opinion was as follows: "The additional risk mitigation measures should focus on: (a) Reducing the probability of a fire impinging on the ACM cladding; (b) Extending the time for a façade fire to spread into the hotel rooms; (c) Optimising the emergency response so that evacuation times are reduced and making sure that all occupants are evacuated under façade fire conditions".
168. Finally, under issue 14 they were asked: "What work would be required to allow the hotel to re-open and be operated safely again?"
169. It is unfortunate that the issue was worded in this way, because their answer shows that they did not disagree as to what remedial works were needed, which was simply the removal of the currently installed PE cored category 3 ACM cladding. They agreed that remediation of the existing cavity barrier provision would not be necessary.
170. The disagreement was that Mr Van Gorp's view was that this work could be done with guests still using the Hotel on the basis that "the adequate emergency response planning and additional safety measures (referred to in issue 13 above) could serve as temporary actions until the external wall upgrading works are completed", whereas Mr Bullock considered it doubtful that the LFB would desist from taking enforcement action if guests were moved back into the Hotel without the removal of the category 3 ACM cladding panels.
171. Whilst I will address the detail of their further investigations and evidence as to the nature and extent of the fire safety risk and the efficacy of appropriate risk mitigation measures below, the essential point for present purposes is that Mr Van Gorp did not seek to resile from this agreed position at trial, i.e. that there was no alternative to replacement as the only available permanent solution.
172. In cross-examination, Mr Van Gorp was asked whether the proposed mitigation measures could be used to delay remediation works. His answer was that: "Yes. I think you should start with the remediation fairly quickly, yes, of course, yes, because that can involve the design and other considerations. That should be initiated, yes". He also agreed that where there were no plans in place, the mitigation measures would not suffice to reduce the risk to a tolerable level.
173. However, LPC did advance a detailed case in its closing submissions in relation to the scope of its duty under art. 8 FSO and, since these are points which would also be relevant to the question as to whether or not it is reasonably necessary to remove and replace the category 3 ACM cladding panels, it is convenient to address them at this point.
174. At par. 383.8 LPC noted that art. 8 of the FSO engaged considerations of proportionality and benefit which, I accept, are also relevant to the question as to whether or not removal and replacement are reasonably necessary. LPC referred me to clause 6 of PAS 9980, which states:

"Using tests of proportionality and the benefit gained from the preventive and protective measures taken in response to risk is fundamental to the Fire Safety Order [19]. This, in turn, allows consideration of cost. While cost is unlikely to be a fully determinative factor, it cannot be dismissed in the context of building fire safety. Legal determinations in criminal court cases brought under the Fire Safety Order routinely use cost–benefit considerations to test whether something is proportionate and "reasonably practicable". Given the high costs incurred in remedial action to remove and replace combustible cladding, it is important to establish that this is a risk-proportionate measure, especially when the fire risk posed by external wall construction and cladding is set in the context of other risk factors and fire safety features of the building."

175. On this basis, LPC submits that in the circumstances of this case, the removal and replacement of all of the category 3 ACM cladding panels is not reasonably required, for the reasons expanded on in its written closing submissions.
176. At par. 385 it is submitted that there is no source of ignition for a fire on the structure and exterior of the Hotel building. Reference is made to Mr Van Gorp's supplementary report, at par. 2.1.2, where he stated that "the external wall cavity itself is not normally a source of ignition". On that basis, it was submitted that the category 3 ACM cladding panels could only ignite from a fire source located elsewhere.
177. It is true that, since the internal and external faces of the cladding panels are made of aluminium, under normal circumstances they are extremely unlikely to ignite directly. However, as is well-known post Grenfell, and as the experts agree, the real danger from category 3 ACM cladding panels is that if the PE core does ignite its high combustibility creates a high risk of extremely rapid and widespread fire spread which can allow the fire to reach other places within or adjacent to the structure wherever they appear.
178. At par. 386, it is submitted that assuming Essendi complies with its own duties under the FSO, the risk of an 'internal fire scenario' on the Premises is minimal, given: (a) the absence of any fires having occurred at the Hotel since it opened in 2002; (b) the absence of sources of ignition from cooking and heating, especially given the fire precautions in place relating to such sources; (c) the prohibitions on smoking inside the Hotel; (d) the large number of fire mitigation measures currently in place at the Hotel, as comprehensively summarised by Essendi in around July 2025.
179. This is also a fair point. It would be surprising if Essendi as a reputable hotel operator had not taken all reasonable precautions against the risk of an internal fire. However, as Mr Bullock stated, there is still a risk from guests ignoring the smoking prohibition warnings. He gave the example of an inebriated guest who, ignoring the prohibition, fell asleep in bed with a cigarette. Nonetheless, as Mr Bullock accepted, the consequences of smoking-related activity in a bedroom leading to ignition of or fire spread to the external cladding is unlikely. That said, smoking is not the only risk. As he said in his report at pars. 7.6 and 7.7, there is also the risk of a fire starting in electronic devices brought in by guests, as well as the risk of deliberate fire setting.
180. At par. 387, LPC submitted that the possibility of an "external fire scenario" leading to ignition of or fire spread to the external cladding is also minimal, given that: (a) Mr Bullock accepted that the risk of fire spread from a fire event on one of the balconies on the adjoining property at Williamson Heights was "extremely low"; (b) the risk of fire from sources immediately adjacent to the external walls (for example, from cars or delivery vehicles, from smoking, or from a waste management machine, can largely be managed by prohibiting parking or smoking in the immediate vicinity; (c) the possibility identified by Mr Bullock of a repeat of behaviour where a guest or other person threw a flare at the front entrance, where the flare could have landed on the external canopy, is also unlikely to recur and could be the subject of redesigning the canopy.
181. Again, these are all fair points.
182. However, as against all of these points, it must also be recognised, in my judgment, that there are difficulties with any fire assessment identifying every risk of fire start or spread and also a risk that any fire mitigation measure will not be entirely foolproof, given the vicissitudes of human behaviour, especially in this case in the context of a large multi-story hotel with a large number of short stay guests, at least some of whom may be intoxicated or unruly or both. This is consistent with the opinion of Mr Bullock that "the probability of an ignition of the as-currently installed ACM cladding can only be reduced and not prevented" (report, par. 7.4).
183. At par. 388 LPC makes submissions as to the risks created by the spread of fire though the category 3 ACM cladding panels if a fire did spread to or ignite them. LPC accepts, as it must, that due to their composition there is a serious risk of rapid fire spread vertically and horizontally along the cladding panels. However, it submits that the risk of fire entering through the windows or ventilation ducts is either not established or something which Essendi can and should be expected to remedy itself.
184. The point about the windows not being fire-resistant is explained by Mr Bullock in his report at par. 11.16 by reference to the findings of the Grenfell phase 1 report. Mr Bullock acknowledges that it would be possible to install smoke sealing and fire resisting protection to the vents. He also refers at par. 11.18 to locally removing ACM cladding from directly above fire escape final exits to reduce the probability of fire escape routes being compromised. In par. 11.9 he states that in his opinion these additional measures would have been no more practicable in terms of cost and timeframe than removing the risk presented from the Category 3 ACM cladding by removing it, especially given the work that would be required around the windows and vents and the need to replace the cladding panels thus affected, assuming that this would be allowed under any planning permission which might be required.
185. LPC argues that this "begs the question, unanswered by Mr Bullock, as to why LPC (rather than Essendi) should be required to carry out substantially more costly and time-consuming works". However, there is no evidence that LPC has costed the alternative scope of works and, if it has, it has not produced it. The argument that this work would be for Essendi to undertake at its cost appears to be based on an argument that they are parts of the building for which Essendi is liable under the lease. However, as noted, the current lease excludes from the demised premises all "structural … walls … external finishes and cladding, external … windows … and window frames". LPC appears to argue that the vents are "conduits which are wholly within and exclusively serve the premises". However, whilst the definition of conduits might be wide enough to include these ventilation ducts, since they pass through the cavity from the external face of the outer structural wall to the external cladding panels, to which they are rivetted, they cannot be said to be "wholly within the premises" in my judgment. On any view LPC would be responsible for the removal and replacement of cladding above the fire escape final exits.
186. Further, and standing back, the submission that it would be more appropriate to undertake these piecemeal works, which would leave the vast majority of the highly combustible category 3 ACM cladding panels in place, rather than simply removing and replacing the panels in their entirety, which is the only realistic long-term solution, must be rejected in my judgment. That is especially so if one stands back and looks at matters in the round, rather than from LPC's perspective of seeking to save it from having to bear the cost of replacing the cladding for which it is, based on my conclusions below, legally responsible under the current lease and the FSO.
187. It is submitted by LPC that replacing the category 3 ACM cladding panels is not risk proportionate. In closing submissions this point is introduced by reference to the detailed ASET/RSET analysis conducted by Mr Van Gorp, from which he concludes that "with adequate emergency response planning and additional safety measures safe evacuation could be achieved in realistic worst case incident scenarios". However, as already stated and re-stated, Mr Van Gorp's opinion is not that this analysis can be used to support a conclusion that replacing the cladding in any timeframe is not risk proportionate.
188. Quoting from Appendix 6 to Mr Van Gorp's report, an ASET/RSET analysis is a comparison between Available Safe Egress Time (ASET) and Required Safe Egress Time (RSET) which helps determine whether occupants can evacuate a building safely before conditions become untenable due to fire and smoke.
189. ASET is typically calculated using fire and smoke modelling tools (e.g. Fire Dynamics Simulator using computational fluid dynamics (CFD), CFAST or B-RISK, using zone-modelling techniques); and considers factors such as fire growth rate, ventilation, detection and suppression systems, as well as the building geometry and material.
190. RSET is the time occupants need to evacuate the building safely. It includes several components: (a) Detection Time – this is the time it takes for the fire to be detected; (b) Notification Time – the time between the fire detection time and either the fire alarm, or when occupants are notified of the fire by other means, e.g. text messaging, phone call, etc.; (c) Pre-movement Time – the time it takes for the occupants to decide to initiate evacuation and react; and (d) Movement Time – the time taken to reach a place of safety (e.g. travel time or queuing time).
191. The results of the analysis are, as will be apparent, highly dependent on the assumptions and data input into the analysis, as to which there is scope for legitimate and significant disagreement.
192. There was a dispute between Mr Van Gorp and Mr Bullock about what conclusions could be drawn from undertaking a detailed ASET/RSET analysis in relation to the Hotel building. Mr Van Gorp had undertaken such an analysis as part of his principal report dated 28 November 2025, albeit that by the time of the joint statement this had only been the subject of an initial assessment which had not been disclosed or, thus, able to be addressed in the joint statement dated 24 October 2025.
193. By the time of trial Mr Bullock had undertaken his own ASET/RSET analysis and both experts were cross-examined in relation to their analysis.
194. However, Mr Bullock's primary position was that it was difficult to apply an ASET/RSET analysis to a fire in external wall construction (which may be ignited externally) in a hotel sleeping risk environment and it was not something which he would rely on in justifying why the presence of ACM cladding can be tolerated. That was because: (a) by the time a fire becomes sufficiently large to break into the building, such that it becomes an internal fire and triggers internal automatic fire detection, much of the ASET will have expired as the fire will already be large and could already be severe enough to cause casualties where occupants have not vacated rooms; and (b) there are significant issues with the hotel occupancy profiles which means that the pre-movement time can be significant and would be difficult to accurately predict and rely on.
195. He was cross-examined on this opinion. In my view, both of his points were well made. That is because: (a) the risk of an external fire spreading to or igniting the category 3 ACM cladding panels, which then spreads extremely quickly along the cladding, may be comparatively unlikely but cannot be ruled out – Mr Bullock gave the example of a car fire in a car parked, albeit contrary to warning signs, next to the Hotel at night time; (b) the risk presented by the Hotel, after a well-attended event at the Stadium, containing a large number of intoxicated guests, unfamiliar with the Hotel and slow or unwilling to react to any evacuation warning.
196. Further, although Mr Trompeter was able to suggest in cross-examination improvements which Essendi could make to the Hotel fire safety system to overcome these difficulties, which Mr Van Gorp could also endorse, since many of these had not been raised until trial it was not always possible to reach any clear conclusion as to the practicability and/or cost of these measures.
197. One example was installing a bedside located loud voice alarm which would sound in every room, where studies had indicated that this was far more effective than a sound alarm in terms of reducing the pre-movement time. However, as Mr Van Gorp accepted in cross-examination, this would require a feasibility survey (to determine whether the voice alarm should be a wired or wireless system), followed by the usual stages of design, specification and procurement, and the works being planned and undertaken. Another was targeting occupants of rooms immediately above the rooms where the fire was reported or seen, but that would depend on the Hotel having sufficiently well-trained staff in sufficient numbers available to undertake this personalised approach, especially in the context of the most high-risk time being at night at a time of high occupancy after a major event at the Stadium.
198. Again, it seemed to me, this was a case of LPC seeking to put the onus onto Essendi of having to undertake every and all additional fire safety precautions which could be identified at its own expense in order to save LPC from having to bear the cost of replacing cladding for which it is, on my findings, the responsible person under the current lease and the FSO.
199. There was a significant disagreement between the experts about the ASET time, where Mr Van Gorp proposed 245 seconds whereas Mr Bullock proposed 130 seconds. I agree with Mr Trompeter that Mr Bullock was willing to make some significant concessions under cross-examination, reflecting the fact that he had not undertaken this analysis with quite the same time or attention as had Mr Van Gorp's assistant. Principally for that reason, in general terms I would be inclined to accept Mr Van Gorp's analysis, albeit that I still have some significant reservations as to how much reliance could be placed on this analysis in the case of an external rapidly spreading fire across the external cladding.
200. There was also a significant disagreement about the RSET time. The real difference was not about the applicable time for the majority, i.e. the able-bodied and responsive, but for the minority who might have physical disabilities of various kinds and, especially in the context of staying in an unfamiliar hotel, especially if affected by intoxication or otherwise, might be less able to hear any alarm, less able to understand the significance of the alarm, less able or willing to accept the necessity for a speedy evacuation, less able or willing to do so in a speedy time, and less able or willing to move speedily from room to a place of safety.
201. Mr Bullock had chosen the 99^th percentile, which LPC submitted was overly conservative. In relation to pre-movement time Mr Van Gorp had adopted 300 seconds as opposed to Mr Bullock's 30 minutes. I accept that 30 minutes also appears overly conservative, but equally Mr Van Gorp's estimate of 300 seconds for impaired, sleeping people depended on there being a voice alarm and in my view is otherwise overly optimistic.
202. In particular, I accept Mr Bullock's conclusion in par. 7.54 of his second supplemental report that the data relied upon by Mr Van Gorp is not sufficiently robust to be relied upon for present purposes.
203. It also appears to me that the wide range of pre-movement times to be adopted in such contexts, as appears from the British Standard Institution ("BSI") Guidance PD 7974-6: 2019 on the "Application of fire safety engineering principles to the design of buildings", means that one would need to adopt a large margin of safety in the context of the combination of the potential impact of a night-time evacuation of a high-rise hotel fully clad in category 3 ACM cladding panels. In section E.4 C: "Sleeping", the following points were made: (a) "with all forms of sleeping scenarios, it is difficult to obtain short pre-travel times"; (b) "due to the long periods reported and their extreme variability, very conservative default times might need to be used"; (c) "for sleeping and unfamiliar scenarios such as hotels (especially at night), the above studies considered that occupants cannot be relied upon to evacuate efficiently without management intervention; and (d) "even for a well-managed occupancy with a well-designed warning system, the studies suggested that default 1st percentile pre-travel time should be 15 min. For managed occupancies, somewhat shorter times may be appropriate if occupants are well trained. In a modern chain hotel with loud alarms sounders at the bed head a total evacuation to the street during the early hours was achieved within approximately 3 min, which illustrates that in some situations rapid pre-travel and total evacuation times can be achieved".
204. In short, Mr Van Gorp has assumed 300 seconds on the basis that the Hotel in this case can be equated to the modern chain hotel equipped with loud alarm sounders, but: (a) at present, there are no loud alarms sounders in place and no research has been carried out as to the feasibility or cost of doing this to an acceptable specification; and (b) I am not prepared to accept that 300 seconds is a sufficiently conservative assumption, given a realistic worst case scenario of a significant proportion of guests who fall into or more of the following categories: heavily intoxicated; in deep sleep; unfamiliar with their surroundings; and/or generally unwilling to remove themselves and their belongings from their bedrooms with appropriate urgency.
205. It is also convenient at this stage to refer to the list of mitigation measures which LPC provided as part of its closing submissions which were designed to show that there were a large number of mitigation measures which were reasonably available to Essendi at reasonable cost and which would mitigate the risk of fire. These are relevant to the risk of fires starting, the risks of such fires spreading via the category 3 ACM cladding panels and the risk of harm to persons in particular occurring as a result. They are therefore said to be relevant as to the objective need for the category 3 ACM cladding panels to be removed and replaced, as to the question of breach of contract and also as to the reasonableness of the closure decision.
206. The first is avoiding the risk of fires starting and spreading externally through fires in parked cars and a compact waste disposal unit adjacent to the Hotel building. Mr Bullock accepted that parking close to the Hotel building could be prevented and the unit could be relocated. However, it is true that unless substantial permanent anti-parking structures were installed the risk of unauthorised parking could not be completely avoided all around the Hotel building.
207. The second is avoiding the risk of a fire starting by lighted materials lodging between the awning and the external walls. This risk was raised in the context of the flare being discharged at the front of the Hotel building. It was said that modest alterations to the awning could be made to ensure that any such materials would roll back. Again, I accept that this would likely be effective in the main but again that the risk from this – or similar previously unanticipated events - can never be completely avoided.
208. The third was installing automatic fire dampers in the vents leading from the bedrooms to the exterior of the building. These could be installed or the ventilation simply closed up. Mr Bullock accepted that this would be practicable, although the precise scope of works, costs or timetable had not been investigated in any detail by either party or expert and nor had the intangible impact on the guest experience through having no access to fresh air.
209. The fourth was installing a voice alarm. This has already been discussed. Again, Mr Bullock accepted that this would be practicable, although again the precise scope of works, costs or timetable had not been investigated in any detail by either party or either expert, and would depend on whether the system was a wireless or wired system and whether it could be incorporated within the existing system.
210. The fifth was installing external CCTV / cameras. These could detect fires and also detect suspicious external activity. Again, the precise scope of works, costs or timetable had not been investigated in any detail by either party or expert. Whether they would provide automatic notification or would depend on someone observing the screens was not investigated.
211. This raises a wider point, which is the additional staff cost of providing the personnel necessary, particularly at night, to ensure that any emerging or spreading fires were notified and the necessary action taken. In particular that would appear to include action to ensure, as Mr Van Gorp suggested, that: (a) rooms above or either side of rooms in which a fire had been identified were evacuated first; (b) those in rooms with slow responses were identified and individuals despatched to rouse and evacuate them; and (c) generally, to ensure a speedy response from all guests to such occurrences.
212. This wider point, namely the cost of these mitigation measures, is also relevant to the suggestion made by Mr Van Gorp that Essendi could choose to reduce the risks by reducing occupancy, for example by restricting occupancy above a certain floor height to promote rapid evacuation from the Hotel, or by not allowing rooms either directly above or to the side of one occupied room to be let to other guests, thus reducing the fire safety risk from a fire starting in that room from passing via the cat. 3 ACM cladding panels external to it to spread upwards or sideways to occupied rooms.
213. In the light of the remaining areas of risk, the areas of risk which have not yet even been anticipated but may still exist, and the wider cost and practicability considerations, and returning to Mr Van Gorp's core evidence, I am unable to accept LPC's submission, if made, that it would be justified to allow the category 3 ACM cladding panels to remain on the Hotel building indefinitely. If it is suggested, it would be so contrary to all of the evidence, including but not limited to the expert evidence, that it must be rejected.
214. Further, and in conclusion, if it be suggested that, on an objective analysis, there is no need for the category 3 ACM cladding panels to be removed and replaced in the short or the medium term, because the Hotel can be operated without exposure to any unacceptable fire safety risk by retaining the existing fire safety mitigation measures and extending the fire safety mitigation measures in accordance with those suggested by Mr Van Gorp and LPC at trial, I reject that submission for substantially the same reasons as given above. It involves taking a risk or, more accurately, requiring Essendi to spend money to remove the risk and take the risk of serious adverse wider consequences of the risk materialised, for no objectively good reason. It is also worth pointing out that in addition to the evidence of Mr Bullock and Mr Van Gorp at trial it was also the view of Mr Hourqueig when he was first involved in early 2025 (i.e. his recommendation that the existing ACM panels should be removed and replaced by LPC as soon as possible, albeit his view also being that the Hotel could safely be operated in the meantime) and that view is also consistent with the Fire Safety Deficiencies Notification issued by the LFB in May 2025 requiring the remediation of the category 3 ACM cladding to be achieved within a longstop of 14 months.
215. That conclusion is a convenient point to move onto the second core issue.

F. The second core issue: the justification for and reasonableness of the closure decision.

The legal principles to be applied.

216. There was no dispute as to the appropriate legal test to apply in determining this issue, but there was some difference as to its application, so I will begin by stating what is in my view the correct approach to apply.
217. Essendi's case, in summary, is that the court needs to consider the justification for the closure decision on the basis of the three legally separate but factually interlinked questions, being: (a) factual causation, i.e. but for LPC's breaches of the current lease would Essendi have closed the Hotel to guests on 29 July 2025 or at all? (b) legal causation or remoteness, i.e. was Essendi's closure decision so legally 'remote' from LPC's breaches of covenant that LPC should not be liable for the consequences of the same, which involves asking whether Essendi's decision to close the Hotel was a foreseeable - or 'not unlikely' - consequence of LPC's breaches of the current lease? and (c) mitigation, i.e. whether or not Essendi's decision to close the Hotel was one which a reasonable and prudent person could be expected to take in the ordinary course of business?
218. In relation to the factual causation "but for" test, LPC agreed, referring to the judgment of Lord Briggs JSC (with whom all of the other judges agreed) in Recovery Partners GP Ltd v Rukhadze [2025] UKSC 10, [2025] 2 WLR 529, at par. 35, where he said that:

"The question what loss has been caused by a breach of contract is usually answered (at least in part) by asking whether the alleged loss would have been suffered if the contract had been performed, rather than broken. Likewise, the object of an award of damages in tort is to put the claimant in the position which it would have enjoyed if the tort had not been committed. Put another way, the object of an award of damages in both cases is to put the claimants in the position which they would have enjoyed 'but for' the breach of contract or the tort. Both processes of analysis necessarily involve the erection of a 'but for' type of counterfactual, namely a hypothetical fact-situation where the contract had been performed without breach or the tort had not occurred."

219. LPC raises a number of arguments in relation to factual causation, which I address below.
220. In relation to the legal remoteness test in contract cases, this is conveniently summarised in par. 33 of the joint judgment of Lords Hamblen JSC and Burrows JSC (with whom all of the other judges agreed, Lord Leggatt JSC giving the only separate concurring judgment) in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21, [2024] 2 WLR 1095 where they stated that: "the question to be asked is whether the type of loss suffered was reasonably contemplated by the defendant at the time … the contract was made as a serious possibility".
221. LPC does not, as I understand it, raise any separate arguments in relation to legal remoteness. That is not surprising, since in my judgment it is obvious that at the time of entry into the current lease in March 2019 LPC must, if it had applied its mind to such matters, reasonably have contemplated as a serious possibility that if it was discovered that the Hotel building was, contrary to the then apparent belief, entirely clad in highly combustible category 3 ACM cladding panels, the Hotel might need to be closed for fire safety reasons until such cladding panels were removed. Whilst obviously the question as to whether or not it would actually need to be closed or could have stayed open with mitigation measures could not have been known, that closure was at least a serious possibility must have been known.
222. In relation to mitigation, Essendi referred me to the concurring judgment of Lord Leggatt JSC where he said, at pars.174-176, in amplification of the observations of Lords Hamblen JSC and Burrows JSC, that:

"Although traditionally described as a duty, it is now well recognised that mitigation is not a duty owed to the wrongdoer but is an aspect of causation … The principle is that if the claimant chooses to respond to the defendant's breach of duty in a way that would not reasonably be expected, damages will be assessed as if the claimant had responded in the expected way, even though in fact it did not": par. 175.

"The general standard is captured in the approach adopted by the House of Lords in British Westinghouse Electric and Manufacturing Co Ltd v. Underground Electric Railways Co of London Ltd [1912] AC 673, 689-690, of asking whether the course of action taken by the claimant was one which a reasonable and prudent person could be expected to take in the ordinary course of business": par. 176.

223. At par. 186 onwards he also referred to cases where "potential damage to commercial reputation was treated as relevant": see, e.g., Banco de Portugal v. Waterlow & Sons Ltd (where "despite the absence of a legal obligation, the claimant had compelling reasons to act as it did [which] included the vital importance to its own… finances of protecting its own credit and reputation"). Having discussed the authorities, he also held that: "The claimant's response to a predicament created by the defendant's breach of duty may quite reasonably and in the ordinary course of business be influenced by factors which are not capable of quantification or which, even if they could be quantified, would - if incurred – not represent recoverable losses … [including] the prospect of serious damage to the claimant's reputation" (par. 191).
224. The parties also referred me to my previous judgment in Martlet Homes v Mulalley [2022] EWHC 1813 (TCC), which concerned, among other things, whether the Claimant housing association could recover damages for the provision of a "waking watch" to provide enhanced fire safety protection in a multi-storey tower block containing flats occupied by its tenants pending fire safety related remedial works.
225. In that case I considered the question of mitigation at pars. 298 to 302. I concluded, uncontroversially, that "in all cases … the principle [is] that the touchstone is what is reasonable". I observed that much might depend on the knowledge which the claimant had at the time in question. I also observed that in some cases "the claimant may not even have known at the time that there was more than one option reasonably available to him or that - as it would subsequently transpire with the benefit of hindsight - one of them would prove better than the other. In the latter cases, if a claimant has to make a choice as a matter of urgency or on incomplete information then it is not surprising that the court will not be too critical of a decision to choose option A which, with hindsight, turns out to be more expensive than option B".
226. I also considered the issue of reasonable reliance on expert advice and reasonableness of the claimant's expenditure. At par. 307 ff I referred to the decision of HHJ Coulson QC in McGlinn v Waltham Contractors [2007] EWHC 149 (TCC) from [795] onwards. As relevant to this case, it seems to me that the following propositions are relevant:
227. First, that "although reliance on an expert will always be a highly significant factor in any assessment of loss and damage, it will not on its own be enough, in every case, to prove that the claimant has acted reasonably and it is not necessary for the defendant to prove conduct by the expert amounting to professional negligence or similar" (par. 308).
228. Second, that consistent with the general principles applicable to mitigation, a judge, particularly in this context a TCC judge dealing with criticisms made at trial of decisions taken by a claimant in reliance on expert advice, will be reluctant to find such decisions unreasonable if that claimant obtained and acted upon apparently competent advice from an apparently competent expert, all other things being equal (par. 311).

The Claimant's primary case

229. The Claimant's primary case appears from pars. 446ff of its closing submissions, where it contends that:

"What a "reasonable and prudent person" acting "in the ordinary course of business" would have been expected to do – when faced with the realisation that the exterior of its hotel was almost entirely clad with Category 3 ACM (which was apparently even more flammable than that which was installed on Grenfell Tower) and where its landlord was refusing to take any steps to remove that cladding – was to consult a reputable fire engineer and then follow their advice. In this case, C received Mr Bullock's detailed advice, challenged it in a series of emails and in a detailed Teams call including by reference to the advice of another suitably qualified expert, and then acted on his advice.

This being so, C submits that it acted reasonably and/or as a prudent hotelier would have done in making its decision to close the Hotel to guests as of 29 July 2025. If anything further needed to be added to this (and it is submitted that it does not), the Court will also note that C is a substantial hotel operator with a significant reputation (goodwill) to protect; it is not a 'single site' operator. C was not being cautious, C was simply following advice. However, to the extent the Court considers C's approach was cautious, it is submitted that a cautious approach would have been a reasonable one given the risks both to life and to C's wider business interests, including potentially significant reputational damage and the risk of criminal liability for C's directors. For the same reasons, C can be viewed as acting commercially as a 'prudent hotelier'.

"D's position, by contrast, appears to be based principally on the flawed premise that the Court should effectively re-make C's decision for it based on Mr Van Gorp's evidence as adduced (many months after C took the decision to close the Hotel to guests) in these proceedings. An obvious preliminary point to make is that C had not sought (or received), and so was not acting upon, Mr Van Gorp's advice at any time before making its decision to close the Hotel to guests. C relied, reasonably, on Mr Bullock's advice (and Studio Fahrenheit's advice, since it was also considered and Mr Hourqueig gave his views on the same Teams call as Mr Bullock).

C submits that this should simply be the end of the closure issue and the Court does not actually need to engage with Mr Van Gorp's stated opinion as to whether the Hotel could have been kept open pending removal of the Category 3 ACM cladding."

230. Essendi's alternative position was that "In the event that the Court does consider it necessary to engage with Mr Van Gorp's opinion as to the need for the Hotel to be closed to guests, C's position is that Mr Van Gorp's evidence is deeply flawed in a number of respects. On any objective analysis, no reasonable hotelier would rely on Mr Van Gorp's analysis, as against Mr Bullock's analysis, to justify keeping the Hotel open to guests for any period of time (albeit, again, Mr Van Gorp repeatedly states that the Hotel could only be "kept open temporarily" and that the measures he suggests "could serve as temporary actions until the external wall upgrading works are completed" without ever making clear what timeframe he envisages as being "temporary" – and of course in circumstances where D has still not agreed to carry out any such works, let alone start them). C's decision to close the Hotel to guests was made at a time when D's position was that it did not intend to replace the Category 3 ACM cladding at all (as its statements of case in these proceedings made plain)".
231. Essendi then made detailed submissions in relation to Mr Van Gorp's evidence which I have either already addressed or shall address below.

The Defendant's case

232. LPC advances its case on a number of bases, which I shall consider below.

My approach

233. I accept that each of the points made by Essendi has considerable force. However, as will be apparent from my analysis of the legal principles, I do not consider that it is enough for Essendi simply to say that it followed Mr Bullock's advice and had regard to the wider reputational and other consequences of keeping the Hotel open in the face of that advice, so that there is no need to engage with the arguments advanced by LPC. Nonetheless, I accept that it is not appropriate for the court to conduct a retrospective exercise to decide whether, on the balance of probabilities, it prefers the views of Mr Van Gorp as expressed at trial to those of Mr Bullock and, if it does, to conclude that Essendi did not act reasonably to mitigate its loss in relying on the views of Mr Bullock as expressed at the trial. In short: (a) reliance on expert advice is a powerful piece of evidence in support of a conclusion that a claimant acted reasonably in mitigation of its loss, but it cannot be decisive; but (b) the court should not conduct a retrospective mini-trial of the issue by reference solely to its view as to which expert's evidence it prefers at trial.

Analysis and conclusions

234. It follows from what I have said that it is important for the court to consider the position Essendi was in at the time it commissioned advice from Mr Bullock.
235. The following factors are relevant in my judgment.
236. First, by March 2025 Essendi had: (a) obtained a detailed report and updated FRAT from Hydrock fire engineers, which confirmed that the external cladding comprised category 3 ACM cladding panels and: (i) the panels required removal and replacement as a crucial step in lowering the risk rating; (ii) the mitigation measures should not be relied upon as a long-term solution; (b) obtained formal advice from Mr Hourqueig that, whilst there were extensive fire mitigations, in the absence of an action plan from LPC within a month to remove and replace the category 3 ACM cladding panels Essendi should vacate the Hotel; (c) seen the Fire Safety Deficiencies Notification requiring the category 3 ACM cladding panels to be remediated by May 2026.
237. Second, at all material times since first notification in late 2024 LPC had been unwilling even to admit that the Hotel building was covered in category 3 ACM cladding panels, let alone to admit that it was liable to remove and replace the cladding under its covenants in the current lease and, instead, appeared determined to contend that this was Essendi's responsibility, to contest the litigation down to trial and to oppose any attempt at expedition. It had made no attempt to take steps to comply with the Fire Safety Deficiencies Notification. It had not, so far as Essendi was aware, even taken any steps to obtain advice from a fire safety consultancy or engineer.
238. Third, the lease terms and their effects were not entirely straightforward, especially given the provisions in relation to defects in the cladding under the original lease. It is true that under clause 4.3.4 of the current lease Essendi did have the right to carry out and complete any work which LPC had failed to carry out in breach of its repairing covenant and to deduct the costs of so doing from the rent. However, for Essendi to seek to undertake such works on an unilateral basis, which would require considerable planning and organisation and cost, and in circumstances where LPC as its landlord did not accept that the works were either required or its responsibility was, to put it mildly, a course fraught with difficulty and risk.
239. Fourth, if Essendi was right that LPC was obliged to remove and replace the cladding panels under the current lease but was wrongfully and in breach of contract refusing to do so, then Essendi had a right of indemnity from LPC under clause 4.9 in respect of all losses etc. incurred etc. as a result.
240. Finally, it was entirely reasonable in my view that Essendi should wish to instruct a pre-eminent fire safety expert such as Mr Bullock, both to review the advice in relation to closure and also to act as its Part 35 expert in the proceedings. Mr Hourqueig had already given Essendi advice, but in my view it was an entirely sensible decision, especially given LPC's approach to the litigation thus far, not to take the risk of going to trial with an expert who had already advised Essendi on a commercial consultancy basis in relation to this Hotel and also to other hotels within its portfolio. The risk of Roman Hourqueig being accused of a lack of independence was all too obvious.
241. It is also important to consider Essendi's approach to the instructions given to and advice received from Mr Bullock.
242. The first point is that he was initially instructed to provide a detailed fire safety engineering report but not, specifically, to advise on the need for the Hotel to be closed. In other words, it cannot be said that his opinion was being sought on the basis that Essendi had already decided to close the Hotel, whether for fire safety related reasons or otherwise (I have already dismissed the suggestion that it had some ulterior motive for wishing to do so), and simply wanted Mr Bullock to rubber-stamp that decision. Instead, it is fairly obvious from the fact that Essendi's approach thus far had been to keep the Hotel open and to obtain and follow advice about fire risk mitigation measures that it had no particular wish to close the Hotel. Nor did his initial opinion make any reference to closure of the Hotel. His opinion was simply that the removal of the category 3 ACM cladding "should be undertaken as soon as practicably possible and that this process should not be delayed for reasons other than mobilisation of the design and contracting resources necessary".
243. The second point is that Essendi had also asked Mr Hourqueig to provide his own updated advice in the light of events since February 2025 and his advice was that he believed that the Hotel could remain open from a fire safety risk perspective but that he was worried about reputational risk. It is clear from Essendi's approach to the conflicting views of the experts that this advice from Roman Hourqueig was not simply ignored.
244. The third point is that, following the hearing before Constable J, Essendi was aware that the court proceedings would not provide a final resolution for probably at least a year, so that matters could not simply be deferred on the basis that they would be resolved within a very short timeframe.
245. The fourth point is that after 17 July 2025, when it became clear from Mr Bullock's detailed email that his professional advice was that the Hotel should be closed until the category 3 ACM cladding panels were removed, that advice was not simply accepted without question. This was despite him referring to the risk of prosecution for breach of the FSO should the Hotel continue in operation. Instead, a full meeting was arranged, involving the principal persons involved within Essendi as well as internal and external legal advisers, at which both Mr Bullock and Mr Hourqueig were invited to attend to discuss their respective advice "and to discuss any further mitigating factors that would allow Essendi to continue operating as a hotel". Again, it is obvious that no decision had been taken by then and that the option of keeping the Hotel open was not being discounted.
246. The fifth point is that the minutes of the meeting on 24 July 2025 record that there was a full discussion of the various views and options. It is apparent that Mr Hourqueig acknowledged the risks of a high-level fire involving the category 3 ACM cladding panels but would still support the Hotel remaining open if "works are agreed and taking place with the landlord within the coming 12 months". Essendi could not, however, have had any confidence that this would happen; instead, in my view, all that could confidently be said was that, unless LPC performed a sudden and wholly unexpected volte face, there was no realistic possibility of that happening. In contrast, Mr Bullock maintained his opinion, referring in particular to the risk profile of sleeping and/or intoxicated guests.
247. The sixth point is that even then no final decision was made at the meeting. Instead, additional mitigation measures were to be reviewed, as was the comparative costs of closure and undertaking remedial works, and a decision then made.
248. It is a fair criticism of Essendi that there is no satisfactory evidence of any detailed review of additional mitigation measures or of the comparative costs of closure or undertaking works. As I stated above, however, in my judgment the most likely explanation is that it had become fairly clear by the end of the meeting or shortly afterwards that these investigations would produce nothing further of any significance and that it was a decision the directors would have to make on the basis of the information they already had.
249. The seventh and final point is that the final decision was then taken by the two directors, Mr Van Der Graaf and Ms Neubert, after receiving a further confirmatory email from Mr Bullock making clear that he had not changed his views, with advice from internal lawyers and with further input from Mr Van Der Graaf's immediate superior, Mr Clavié. As I have already found, it appears that it was Mr Clavié who persuaded them to accelerate the closure decision on the basis of his assessment of the risk to Essendi and to them as its directors in the event that there was a fire in the period up to closure taking place.
250. In short, it is plain, in my judgment, that Essendi did not have any pre-conceived intention to close the Hotel and, to the contrary, did not particularly want to do so, and would not have done so but for the firm advice received from Mr Bullock, which they subjected to intensive and extensive consideration, with input from a more active proponent of the Hotal remaining open in the shape of Mr Hourqueig.
251. In my judgment, the principal reasons for the decision were: (a) the clear and firm advice they received from Mr Bullock that there was an unacceptable risk to guests in the event of a fire involving the category 3 ACM cladding panels, which could not be mitigated by further clearly identifiable remedial measures; (b) the clear and firm advice they received from Mr Bullock as to the risk of criminal prosecution of Essendi and, possibly, its directors and others in the event that such a risk materialised, coupled of course with the clear reputational risk to Essendi in the event of such a fire occurring post Grenfell; (c) the absence of equally firm and clear – or obviously more compelling - advice to the contrary from Mr Hourqueig; and (d) the absence of any good reason to believe that the category 3 ACM cladding panels would be removed within any timescale of less than 12 months or thereabouts, whether by LPC changing its stance, or by some compromise, or by Essendi being able to do so itself under the current lease, or by court order following an expedited trial.
252. It is not suggested by Essendi that it had previously made LPC aware that it was considering closing the Hotel. LPC thus had no opportunity to make any representations to the contrary. However, since by that stage there is no suggestion that LPC had instructed or obtained a Fire Risk Assessment External Walls ("FRAEW") or received any advice from any fire safety experts, whether Mr King or Mr Van Gorp or otherwise, there is no credible basis for contending that it could have offered any useful input within any reasonable time period – let alone advanced the arguments which have been advanced so strenuously at trial – if they had been given that opportunity.
253. Further, given the involvement of Mr Hourqueig, it was not as if Essendi was relying solely on the uncritically tested views of just one fire safety expert. Instead, it was relying on the clear and consistent view expressed by a leading fire safety expert whose views had been subject to critical analysis and testing by another well-respected fire engineer, whose own view in the end was based on something happening within a 12-month period which, as explained, was inherently unlikely.
254. It follows, in my judgment, that this is not a case where it can be said either that Essendi ignored other expert advice reasonably available to it or that the question of mitigation should be decided on the basis that, had they acted reasonably, they would have had access to the views of Mr Van Gorp or his equivalent as well as to those of Mr Bullock at the time the closure decision was made.
255. Instead, I am satisfied that on the basis of the evidence reasonably available to them in relation to the nature and extent of the current fire safety risk and the alternative options to closure, and taking into account the reputational risks and the risk of criminal prosecution, their decision to close the Hotel when they did cannot be said to be anything other than reasonable.
256. It is nothing to the point that other organisations in the position of Essendi, receiving possibly different advice, might not have done so.
257. Further, and in response to the particular points made by LPC in its closing submissions, I set out my view in the following paragraph.
258. In response to the criticism of the evidence disclosed by Essendi in relation to its decision-making process, in my judgment the evidence is full and detailed.
259. In response to the suggestion that Essendi did not obtain any input from its insurers in relation to what requirements they might impose, the evidence indicates that Mr Ardaillou did make contact with the insurance brokers but received no response and, in any event, it is difficult to see what difference this could realistically have made to the decision either way.
260. In response to the submission that the details of the Hotel Management Agreement as between Essendi and Accor were in some way relevant to the decision-making process, in my judgment the contractual provisions as between Essendi and Accor in relation to force majeure events are of no real relevance to the closure decision.
261. In response to the submission that Essendi should have taken into account the lack of any previous fires that, in my view, is a submission which carries little weight, because it ignores the risks associated with complacency based on what may simply have been good fortune. It also ignores the need for fire safety risk assessments to focus on anticipated risks even if they have not previously eventuated. It also ignores the point made by Mr Bullock about the risk of a fire involving the external cladding possibly being very low, but the consequences of such a fire being extremely serious, as the Grenfell fire itself demonstrates.
262. In response to the submission that Essendi's approach to the decision whether or not to close the sister hotel, the Ibis Hotel Hounslow, was inconsistent with the decision in relation to the Hotel, I am satisfied that the different treatment is justified for the reasons explained in par. 501 of Essendi's closing submissions. In any event, even if the treatment was different, that is not in itself of any particular relevance, especially since I have rejected the submission that there was a different true reason for the closure than that put forwards by Essendi.
263. In response to the suggestion that Mr Bullock could not properly have advised Essendi without undertaking an ASET/RSET analysis, I am satisfied that: (a) there was no obligation for him to do so; (b) the reasons he gave for not doing so are credible; and (c) even had he done so, he would have reached the same conclusion he reached at trial, which I am satisfied was reasonable, which is that an ASET/RSET analysis for this Hotel would not have provided sufficient assurance in relation to the risk to the category of sleeping and/or intoxicated guests who must be taken into account in a worst case scenario.
264. In response to the suggestion that Essendi failed to consider further mitigation measures, in my judgment: (a) this ignores the substantial mitigation measures which Essendi had already put in place prior to the closure decision, in reliance on advice from Mr Hourqueig and others; (b) I have already considered the further mitigation measures identified by Mr Van Gorp and I conclude that they do not in themselves provide sufficient assurance that the fire risk safety profile of the Hotel with the category 3 ACM cladding panels in place could sufficiently be reduced to permit continued operation beyond the short term.
265. In par. 446.9 of LPC's closing submissions a list of further mitigations are identified, namely: "(i) adding dampers to or plugging the vents; (ii) installing a voice alarm system, perhaps a wireless one which would be very quick and simple to set up; (iii) installing cameras or infrared flame detectors externally to monitor external risks; (iv) instituting staggered occupancy, reducing occupancy, occupying to only the lower levels; (v) arranging for fire marshals to walk the corridors at night; and (vi) training staff in alarm procedures to prioritise the most at-risk compartments. Every single one of these measures is inexpensive and quick to implement".
266. I note that fire marshals were not even considered by Mr Van Gorp. The remainder were all suggested by LPC without any detailed investigation as to practicability or cost. They all place the onus, cost and risk on Essendi, in circumstances where on my findings it is LPC which is in breach of its lease covenants and ought to have removed the cladding many months before Essendi made the closure decision.
267. In my judgment, for the reasons I have given, these points do not demonstrate that the closure decision was unreasonable.
268. I have also already considered and rejected the argument that as at July 2025 it was reasonable, in the light of the case management directions given on 4 July 2025, to allow the Hotel to remain open on the basis that there was going to be a trial by March 2026. I have also already considered and rejected the submission that the closure decision was "unreasonable and/or taken in bad faith and/or was motivated by extraneous commercial considerations unrelated to this litigation". Given the almost complete lack of any evidential basis for it, I am surprised that the allegation of bad faith was ever made or pursued to closing submissions.
269. Finally, in par. 448, it is said that: "even if … the Closure Decision could be described as reasonable, it was not solely based on defects in the Cladding Panels. It was based on a holistic understanding of fire risk based on numerous factors including those which are Essendi's responsibility. This is evidently so in relation to the Conduits (which include non-compliant cavity barriers and vents). Essendi's failures with respect to these features are an effective cause of all its alleged losses, including financial losses arising from the decision to close".
270. I do not accept this submission. I have already rejected the submission that the vents are Essendi's responsibility under the current lease and I reject the further submission, addressed below, that the cavity barriers could be described as forming part of the conduits or as within a conduit. In any event, the evidence is overwhelming that it is the presence of the category 3 ACM cladding panels which was the real cause of the closure decision and, indeed, the reason why Essendi is bringing this claim. Alternatively, and even if this was wrong, for the same reasons as I gave in the Martlet case, I would have been satisfied that: (a) it constituted an effective cause of the closure decision; and (b) in the circumstances of this case, that is sufficient to establish factual causation.
271. Two further final points arise.
272. The first is that during the course of the trial it was made clear by Mr Bullock and accepted by Mr Van Gorp that, even if it was technically possible from a fire safety risk assessment for the Hotel to remain open, in order to fulfil its duty of care towards its guests (as well as its employees and all other lawful visitors) it would be necessary for Essendi to advise them that the Hotel was clad in highly combustible cladding panels so that all guests (and employees and other visitors) needed to pay particular care in relation to any conduct capable of causing a risk of fire, and particular attention to any indications of fire and to any fire or evacuation alarms. It seemed to Mr Bullock, and it seems to me, although I am of course not an expert in hotel operation, that to do so would itself likely inflict such commercial harm on bookings as to make such an option commercially unrealistic.
273. That may be of some relevance to the second and final point I would wish to make. What I have decided is that LPC is liable for losses caused by Essendi's decision to close the Hotel. It may be that following receipt of this judgment LPC might consider commissioning Mr Van Gorp or some other fire safety engineer to undertake a fully specified and costed assessment of all additional reasonable fire safety mitigation measures which have now been identified which ought to lead to Essendi being reasonably satisfied that the Hotel could now re-open even whilst removal and replacement of the cladding panels is taking place and, if Essendi failed to do so, to seek permission to amend its Defence to contend that this was itself a new intervening failure to act reasonably to mitigate Essendi's continuing loss. If that is what it wishes to do, as well as needing to engage with the additional staffing and other ongoing costs of taking the steps necessary for these mitigations to be effective, it would also need to consider whether it is likely to make any real difference (and, more pertinently, to render the Hotel profit-making) if the Hotel had to re-open on the basis of having to give warnings to guests along the lines I have indicated.

G. The terms of the original lease and the current lease.

274. It is convenient to begin with those terms of the original lease of relevance to the most significant issues in the case, and which are, save in relation to the cladding provisions in clause 3.27, carried through into the current lease unaltered. I have already summarised the essential terms of the lease in the chronology at D(ii).
275. Under clause 3.4.1 the tenant was obliged to "put and keep the premises … at all times in good and substantial repair and condition …". Under clause 4.3.1 the landlord was obliged to "put and keep the building (excluding the premises) including the structure roofs facade foundations lift shafts windows window frames external building envelope waterproofing and subject to clause 3.27 the cladding of the building and the boundary walls fences and structures at all times in good and substantial repair and condition".
276. Under clause 3.10 "the tenant shall not use the premises except for the permitted use" (defined, in short, as the use of the premises as a 2-star standard hotel). Under clause 3.10.4 the tenant was obliged to keep the premises open for business at all times throughout the year … unless excused by one of the reasons set out in clause 3.10.5 (which include "material damage to or destruction of the premises" and "closure of the hotel business… to the extent necessary for carrying out with all reasonable speed major repairs or alterations or refurbishments"). The tenant was also obliged by (b) "at all times to operate the hotel business carried on at the premises … and operate the hotel business … to maximise the gross turnover …", and by (c) to "… assure that at least 90% of the rooms are available for occupation at any time". Further, although there was by clause 4.1 the usual landlord's covenant for quiet enjoyment, by clause 5.7: "nothing in this lease contained shall imply or warrant that the premises may be used for the permitted use …".
277. Clause 3.13 was headed "legal obligations". A "legal obligation" was defined in clause 3.13.1 as "… an obligation imposed by or under any present or future statute statutory instrument or bye-law or any present or future regulation order direction requirement notice or code of practice of any authority insofar as it relates to the premises or their occupation or use but irrespective of the person on whom such obligation is imposed".
278. Under clause 3.13.2 "the tenant shall at its own expense observe and comply with all legal obligations (save for any requiring the carrying out of works to the premises or the building in relation to which clause 4.9 shall apply) …". (It is common ground that clause 4.9 is a typographical error and should refer to clause 4.6.)
279. Under clause 3.13.4 "without prejudice to the generality of this clause the tenant shall in particular observe and comply with all legal obligations of any appropriate authority relating to health and safety means of escape in case of fire and the protection and preservation of life and property carrying out such works of modification and improvement to the premises as may from time to time be required by such legal obligations provided that the landlord shall carry out such works where such legal obligations require works to the building or the premises for repair and maintenance of which the landlord is responsible pursuant to clause 4".
280. Under clause 3.19 "the tenant is responsible for and shall indemnify and keep the landlord fully indemnified against all actions proceedings claims and demands brought or made and all losses damages costs expenses and liabilities incurred suffered or arising directly or indirectly in respect of … 3.19.4 any breach of any covenant or other provision of this lease to be observed or performed by the tenant …".
281. Under clause 3.20 the tenant covenanted "to notify the Landlord of any defect in the building and the services and conduits such notification to be given immediately after the existence of any such defect has come to the knowledge of the tenant".
282. As stated, clause 3.27 contains bespoke provisions relating to cladding, which was defined as: "the cladding installed or repaired on the building pursuant to the cladding contract [itself defined as the contract dated 23 May 2005 made between the tenant and Weatherwise] and all curtain walling on the building as at the date of this lease". The cut-off date, as already mentioned, was defined to mean 22 May 2017.
283. Clause 3.27.1 provides that "in the event of disrepair of any part of the cladding which occurs and is evident on inspection prior to the cut-off date the tenant will be responsible for repairing the cladding in accordance with its obligations contained in clause 3.4 as if the cladding formed part of the premises".
284. Clause 3.27.3 provides that "the tenant shall forthwith notify the landlord upon becoming aware of any defect in the cladding and shall inform the landlord as to whether in the opinion of the tenant the defect is due to faulty design materials or workmanship in the cladding or is due to wear and tear or damage falling within the scope of the landlord's repairing obligation in clause 4.3".
285. The following sub-clauses provide for: (a) any disagreement about the cause of the defect to be determined by expert determination (clause 3.27.4); (b) the tenant to procure the making good of the defect if it is due to faulty design etc. and to pursue (if it wished) any claims against Weatherwise as cladding contractor in that respect (clause 3.27.5); and (c) any ancillary works to the structure or exterior to be undertaken by the tenant at the landlord's expense (clause 3.27.6).
286. Finally, in this regard: (a) clause 3.27.7 provided that: "the tenant shall be responsible for and shall indemnify and keep the landlord fully indemnified against all actions proceedings claims and demands brought or made and all losses and damages costs expenses demands and liabilities suffered or arising from any defect in the cladding appearing before the cut-off date …"; and (b) clause 3.27.8 provided that: "the tenant shall not be responsible for remedying any defect appearing in the cladding after the cut-off date and the landlord shall be responsible for any repairs required to the cladding for the remainder of the term of the lease".
287. In addition to the landlord's repairing covenant already mentioned, under clause 4.3.4 the landlord was obliged within one month of written notice from the tenant to commence and then to complete the work required to remedy the breach and in default the tenant might carry out or complete such work at the landlord's cost or deduct the cost from the rent.
288. Clause 4.6, also headed legal obligations, provided that: "where a legal obligation requires the carrying out of works to the building other than the premises for which the tenant is responsible for repair under clause 3.4 then the Landlord shall carry out such works in a good and workmanlike manner after consultation with the Tenant as to the manner and timing thereof so as to cause as little inconvenience and disturbance as practicable to the business carried on at the Premises".
289. Clause 4.9 provided that "the landlord shall indemnify and keep the tenant fully indemnified against all actions proceedings claims and demands brought or made and all losses damages costs expenses and liabilities incurred suffered or arising directly or indirectly from: (i) the state of repair and condition of the building (other than the premises) (except to the extent caused by any default of the tenant); (ii) any breach of any covenant or other provision of this lease to be observed or performed by the landlord".

H. The interpretation of the disputed terms of the original lease and the current lease.

290. It is common ground that the interpretation of a lease is to be approached in the same essential way as the interpretation of any other contract, as to which see the basic principles as summarised in the textbook The Interpretation of Contracts (8th edition, 2024) by Sir Kim Lewison at chapter 1 section 1.

The cladding provisions of the original lease.

291. A useful starting point is the interpretation of the cladding provisions in clause 3.27 of the original lease. They are plainly bespoke additional provisions and should, therefore, be given respect as evidence of the actual intentions of the parties in 2007. They are, however, in my view ambiguous in some respects and, in at least one respect, internally inconsistent.
292. Clause 3.27.1 relates specifically to "disrepair" of the cladding and makes clear that the obligation to repair the cladding in such a case is assimilated into the tenant's repairing covenant, by carving out the cladding from the scope of what would otherwise be the landlord's repairing covenant. It only applies to "disrepair" which both (a) occurs and (b) is "evident on inspection" prior to 22 May 2017.
293. By reference to the well-known decision of the Court of Appeal in Post Office v. Aquarius Properties Ltd [1987] 1 All ER 1055, where Slade LJ observed, pithily, that "a state of disrepair, in my judgment, connotes a deterioration from some previous physical condition", it is apparent that this clause can have no application to a case, such as the present, where there is no evidence that the physical condition of the cladding panels has deteriorated since installation in any way which is relevant to the fire safety issue. Otherwise, it might have been necessary to enquire into what nature of inspection is being referred to in that clause but, in the circumstances, that is unnecessary here.
294. Clause 3.27.3 refers specifically to "any defect" in the cladding. It is obvious that a defect is wider in meaning than a disrepair. The type of defects mentioned in the clause include those due to faulty design, materials or workmanship in the cladding. It seems to me that these words are not limited, expressly or by implication, to defects in design etc. which can be shown to involve a breach of duty by Weatherwise as the cladding contractor. The reference in clause 3.27.5 to Essendi making such a claim if it wishes may well explain the commercial rationale behind this allocation of responsibility (i.e. the assumption that Essendi may well have a claim against Weatherwise as design and build contractor in such a case), but that is not a pre-condition of clause 3.27.3 applying. As a matter of construction, the defect would include one which, up until the tenant becoming aware of it, was a latent defect.
295. It follows, in my opinion, that this clause would include a defect such as the present, i.e. where the cladding panels are defective because, whether through design or materials (and here it would be the design choice to use ACM panels with a highly combustible core), they present an intolerable fire safety risk, even though that would not have been known to most architects or designers, let alone most employers, at the time. This is not in dispute. LPC agrees as much in its closing submissions (par. 419).
296. However, it is necessary for the tenant to have "become aware of" the defect. An issue might otherwise arise as to whether this includes awareness which the tenant ought to have had as a result of conducting reasonable investigations in response to such level of awareness which it already had. However, given the findings I have already made, it is unnecessary for me to consider this further because, even if it was the latter extended meaning of awareness, it is clear that prior to the cut-off date there was nothing which in my judgment ought to have put Essendi on notice of the need to conduct further investigations to ascertain whether or not the cladding panels represented a specific fire safety hazard.
297. I then turn to clause 3.27.7. The indemnity extends to all losses etc "arising from any defect in the cladding appearing before [22 May 2017]". This is to be read together with clause 3.27.8, where Essendi is not responsible for remedying any defects appearing in the cladding after that date and LPC is responsible for any repairs required to the cladding for the remainder of the term of the lease.
298. The question as to what is meant by a defect "appearing" in the cladding in the circumstances of this case is a matter of considerable importance. There is no material difference between a defect "appearing" and its "becoming apparent". The significant difference between the term as used in this clause, as compared with clause 3.27.3, is that in the latter it has to be the tenant who has become aware of the defect, whereas in the former there is no equivalent requirement that it is a defect "appearing" to the tenant. The defect would obviously become apparent if it actually caused a fire or spread of fire. In my view it would also become apparent if it became known to a reasonable person, with the knowledge which the landlord or tenant ought reasonably to have had, that the panels were made of ACM with a highly combustible PE core.
299. I reach this conclusion on the basis that: (a) although clause 3.27.7 is, rightly, categorised by Essendi as an indemnity clause, in reality it is part of a detailed clause (3.27) which seeks to regulate the respective liabilities of the parties in relation to disrepair and defects arising in relation to the cladding the subject of the cladding contract, such that in my view it should not be construed strictly against LPC as it might be if it was a standalone indemnity clause; (b) since clauses 3.27.7 and 3.27.8 are clearly intended to work together, and since clause 3.27.7 does not (as does clause 3.27.3) expressly refer to the awareness of the tenant alone, it must apply where the defect would be apparent to either the tenant or the landlord; (c) for essentially the same reasons as in (b), there is no reason to limit its application to where the defect is actually apparent to either the tenant or the landlord and, instead, it ought to apply where the defect would have been apparent to a reasonable person, with the knowledge which the landlord or tenant ought reasonably to have had.
300. It does not seem to me that any of the authorities cited by counsel provide any real assistance in determining this particular point. That is because they are all either concerned with different points or are decisions in relation to differently worded clauses or, in some cases, both. In particular, it seems to me that the two decisions of the Court of Appeal to which I was referred, where there appears to have been some divergence of approach (Baxall Securities Ltd v Sheard Walshaw Partnership [2002] BLR 100 and Pearson Education Ltd v Charter Partnership Ltd [2007] BLR 324) are concerned with a different point, i.e. what type of constructive knowledge would break the chain of causation in a professional negligence claim, so that it is unnecessary for me to decide that one or the other test should apply to the proper interpretation of the clause in question in this case.
301. Moreover, for the reasons already identified in the chronology, in my judgment whatever the applicable test there is no basis for a conclusion that a different result would be reached. As Essendi submits, the reality is that it was not until after the Grenfell fire that anyone appreciated the need to investigate the nature of the cladding panels at the Hotel building in order to ascertain whether they created a fire safety risk, and that is because nothing happened in relation to the Hotel building between the date of the cladding works and the Grenfell fire which caused anyone to appreciate the need to do so. Simply pointing to an increasing knowledge amongst some professional fire safety experts, architects and designers about the extent of the fire safety risk associated with the use of category 3 ACM cladding panels or, indeed, some developers or property owners of the same, is not enough.
302. The further and final point which I should make in relation to clause 3.27.8 is that, whilst it removes any tenant responsibility for defects in the cladding after the cut-off date, it only imposes liability on the landlord for "repairs required to the cladding" for the rest of the term. This is important in my judgment given the distinction between disrepair and defects. Clause 3.27.8 does not have the effect of imposing a liability on the landlord for defects in relation to the cladding which would not otherwise exist.
303. That is a convenient introduction to the question of the proper interpretation of the landlord's repairing covenant which is the same under both the original and the current lease.

The landlord's good condition covenant.

304. I refer to this as the good condition covenant because Essendi accepts that it cannot rely on the express obligation to put and keep the cladding in good and substantial repair since it accepts, on the basis of authorities such as Post Office v. Aquarius Properties referred to above, that the repair obligation can only apply where there is a disrepair (see above) and that there is no evidence that the cladding is in disrepair in that sense. Instead, Essendi relies upon the obligation to put and keep the cladding in good and substantial condition.
305. Essendi places considerable reliance upon the decision of Lindsay J in Credit Suisse v. Beegas Nominees Ltd [1994] 4 All ER 803. It is helpful to summarise the facts and the decision from the headnote in the All-England Reports. The tenancy agreement related to newly constructed commercial premises with external cladding which, due to defective construction, had allowed water to leak into the building from the outset. The repairing covenant provided for the landlord "to maintain repair amend renew ... and otherwise keep in good and tenantable condition" the structure of the building, including the walls. The tenant argued that this obliged the landlord to undertake works to make the building watertight.
306. Lindsay J held that a covenant which required the landlord to keep the building in "good and tenantable condition" was wide enough to require him to put it into that condition even if it had never been so tenantable, since those words (in keeping with the parallel obligation to "amend" and "renew" and the phrase "defects or want of repair" in the proviso) went beyond merely "to repair" and the obligation was not just to keep the building in good and tenantable condition, but to put the building into that condition which, given the property's age, character and locality, would make it reasonably fit for the occupation of a reasonably minded tenant of the class likely to take it. Moreover, the required condition in which the premises were to be put and kept was to be judged not by reference to the actual state of the building at the date of the demise but, rather, to the requirements of a hypothetical reasonably minded tenant of the class likely to take that building.
307. He further held that on the facts that covenant had been breached and that even if the only solution to the long-standing problem was to dismantle the existing cladding and replace it entirely with a newly designed system, the plaintiff would merely be getting what the hypothetical reasonably minded tenant would always have expected. He also held that the total recladding of the premises (which could not then be regarded as being of a wholly different kind from the premises which had originally been demised) fell within the obligations to "amend" and "renew", which clearly extended to incorporate a total replacement of the subject matter.
308. In my judgment, what Lindsay J said at page 820 of the report is relevant, because it identifies both the general principle, which he plainly accepted, and the two reasons why he felt able to depart from that principle in that case.

"Mr Knight, for the landlord, refers to Slade LJ's remarks in Post Office v Aquarius Properties Ltd [1987] 1 All ER 1055 at 1066 that clear words are needed to impose a contractual obligation on a tenant to remedy defects in the original construction of the building 'at least at a time before these have caused any damage. This is not an obligation which tenants under a commercial lease might reasonably be expected readily to undertake'. Slade LJ does not say, of course, that if clear words to that effect are found they can be overridden. Moreover, as will later appear, I shall hold there to have been damage to the subject matter of the principal covenant."

309. His essential findings appear at page 823: (a) first that as at the date of the lease any hypothetical tenant would have required nothing less than that the property was substantially watertight; and (b) second, on the evidence it had not been, so that on that basis the landlord was in breach of the obligation to put and keep the premises in a good and tenantable condition. He did, however, also identify actual physical consequences, i.e. that the failed double-glazed units had caused carpet water stains as well as stained and encrusted windowsills and mullions. He also identified that the tenant had been unable to use parts of the building when the leakage was at its worst.
310. It thus seems to me that both Essendi and LPC can place some reliance on different parts of this judgment. Essendi can do so because, if one inserted "substantially in compliance with fire safety standards as at the date of the current lease" in place of "substantially watertight", that would appear to justify a conclusion of breach as at the date of the entry into the current lease and continuing, subject to the point about actual physical damage and loss of amenity. LPC can, however, point to these features as being a key difference between that case and this and also providing the essential basis for the decision in that case, because there was evidence of actual physical damage and actual loss of amenity. In short, it may be said that Beegas was a case unlike the present, because in that case the original design defect had led to direct consequences, whereas in this case it has (to date) not.
311. I now need to turn to the two Court of Appeal cases to which I have been referred.
312. The first is that of Welsh v. Greenwich LBC [2000] 3 EGLR 41, which was a case involving condensation causing dampness and severe black spot mould growth to a residential property (albeit not to the structure of the dwelling) due to the lack of any thermal insulation in the brickwork. The Court of Appeal construed the landlord's obligation in a local authority letting "to maintain the dwelling in good condition and repair except for such items as are the responsibility of the tenant" as imposing a liability conceptually different from repair.
313. Robert Walker LJ made a general observation at page 43 which I bear in mind.

"In this case, counsel on both sides have researched the law very thoroughly indeed and, in a field that is densely strewn with authority, they have cited a large number of reported cases for the assistance of the court. But the language of repairing covenants, and the commercial and social contexts within which they occur, are very variable. A decision on the language of one clause is never decisive, and may sometimes not even be helpful, as to the meaning of another clause, even though it uses some of the same words: see, for instance, the well-known observations of Scrutton LJ in Westcott v Hahn [1918] 1 KB 495 at pp511-512; also the observations of Hoffmann J in Norwich Union, at p138, that questions of construction are frequently a matter of impression and are not readily susceptible of precise explanation."

314. He continued that in relation to the "short and simple form" used in that case he was "satisfied that the reference to 'good condition' in clause 2.1 is intended to mark a separate concept and to make a significant addition to what is conveyed by the word 'repair'".
315. His decision was that the judge was right to conclude that, by failing to provide thermal insulation or dry lining for the external walls, Greenwich allowed excessive condensation and severe black spot mould to continue, which cannot be regarded merely as a matter of amenity disassociated from the physical condition of the flat, and so failed to maintain the flat in good condition".
316. As with Beegas, it seems to me that both parties can gain something from this judgment. Essendi can point to the fact that an initial design defect which did not cause structural damage required remedying by the landlord under a good condition covenant, whereas LPC can point to the fact that, as in Beegas, there was nonetheless evidence of the defect already causing physical manifestations which, the court observed, went beyond a lack of amenity.
317. The second Court of Appeal case is that of Alker v Collingwood Housing Association [2007] 1 WLR 2230, which was a personal injury claim where the claimant tenant was badly injured when her arm accidentally went through a glass panel in her front door. The glass was ordinary glass, not safety glass, but was intact and undamaged pre-accident and had, so the trial judge found, probably complied with building regulations when installed, albeit that it had been known for many years that it was a hazard. It was held on appeal that the landlord's obligation to maintain or repair the property and keep it in good condition did not encompass a duty or obligation to make safe something which was not in disrepair and, accordingly, the state of the glass panel did not constitute a "relevant defect" for the purposes of section 4(1) Defective Premises Act 1972.
318. Laws LJ, with whom Carnwath and Moore-Bick LJJ agreed, held at [13] that it was "fundamentally flawed … to equate a duty of repair and/or maintenance with a duty to make safe" and that "a covenant to maintain did not come any closer to a covenant to make safe than did a covenant to repair" and, most relevantly, at [14] that "a duty to keep in good condition …, even if it encompasses a duty to put into good condition, again cannot encompass a duty to put in a safe condition".
319. The covenant in that case provided: "We must keep your home in good condition. We will repair and maintain: The structure and exterior of the building - The structure and exterior of the building, roofs, walls, doors, ceilings, window frames, external doors, drains, gutters, outside pipes. Kitchens and bathroom fixtures - basins, sinks, toilets, baths. Electrical wiring and gas and water pipes. Heating equipment and water heating equipment. Any communal areas around your home - stairs, lifts, landings, lighting, entrance halls, paving, shared gardens, parking areas and rubbish chutes".
320. It may be argued that the Court of Appeal understandably placed little weight on the initial good condition obligation because, although it related to the "home" as a whole, that could not sensibly have been construed as imposing a wide and unqualified good condition covenant, given the immediately following extremely detailed repair and maintenance covenant. It also appears from pars. 15 to 17 inclusive of the judgment of Laws LJ, as well as from pars. 22 and 23 of the concurring judgment of Glidewell LJ, that the decision was based more upon: (a) the earlier decision in Lee v Leeds City Council [2002] 1 WLR 1488 (which concerned a covenant to maintain and repair); and (b) the scope of the duty imposed by the Defective Premises Act 1972, than on any separate analysis as to whether the good condition covenant in that case compelled a different conclusion, notwithstanding that both Beegas and Welsh were referred to in the judgment.
321. I have also been referred to the commentary in Dowding & Reynolds on Dilapidations: The Modern Law and Practice 7th ed. at §8-13 onwards, referring to two decisions of Blackburne J, after which the editors state: "Absent special circumstances, it is thought that where an obligation to keep in good condition is included as part of a wider covenant to keep in repair, it will ordinarily be interpreted as meaning that no work is required until some degree of physical damage or deterioration has occurred".
322. The first of the two authorities referred to is Fluor Daniel Properties Ltd v Shortlands [2001] 2 EGLR 103, at p.110, where Blackburne J stated: "I accept Mr Dowding's submission that the obligations contained in the clause presuppose that the item in question suffers from some defect (i.e. some physical damage or deterioration …)". In the second, Mason v Totalfinaelf UK Ltd [2003] 3 EGLR 91, he stated at p.94 that: "the threshold requirement – the presence of disrepair or deterioration from some previous physical condition – applies as much to the requirement 'to keep in good condition' the premises as it does to the remainder of the covenant …".
323. In the circumstances, I accept that the weight of authority points towards a general presumption that a duty to keep in good condition would not, without more, include a duty to undertake works to put demised premises into a safe condition where that lack of safety results from an intrinsic defect which has not led to any actual damage or disrepair or other physical consequences.
324. In my view, however, that is a general presumption which can be displaced where justified by the relevant prevailing circumstances in which the current lease was entered into, so that there is no invariable rule of interpretation to that effect.
325. Here, in my judgment, the relevant circumstances are such as to demonstrate that, to apply the words of Lindsay J in Beegas, the landlord's repairing covenant ought to be construed as including an obligation to put and keep the building into that condition which, given the property's age, character and locality and, in particular, the fact that it was a tower block exceeding 18 metres in height which was intended and required to be used as a hotel, would make it reasonably fit for such use as regards fire safety risks.
326. I refer to and rely upon the following matters relevant to the proper interpretation of the lease which in my view justify that conclusion.
327. First, as at the point of entry into the current lease the parties were of course aware that this was a purpose built 16 storey (42.5m high) 210-bedroom hotel in Wembley, constructed in the early 2000s, which had been the subject of a full recladding exercise after a relatively short period of time.
328. Second, the parties were aware that Essendi and WHL (as LPC's predecessor in title and family connected company) had entered into the original lease on the basis that, in addition to the landlord's repair, maintenance and good condition covenant which included the cladding, bespoke terms had been agreed whereby - in effect - Essendi had assumed responsibility for disrepair and defects appearing in the cladding until May 2017 and thereafter WHL had assumed responsibility for repairs required after that date. Further, the original lease: (a) entitled Essendi to renew the lease for three further 12 year terms on the same terms (save in relation to the bespoke cladding terms, which were not to apply to any renewed lease); (b) required Essendi to use the premises as a hotel; (c) provided that WHL would receive rent based on a specified turnover percentage; and (d) provided that WHL would have no right to recoup costs incurred under the repair covenant by way of service charge.
329. Third, and very significantly in my judgment, shortly after the cut-off date under the original lease and two years prior to the scheduled renewal date, the Grenfell fire had occurred in a tall tower block with ACM PE core cladding and, in the supervening period between that date and the date the current lease was entered into, there had been a complete revolution in the appreciation of the fire safety risks created by the use of ACM PE core cladding in tall tower blocks, especially those used for residential accommodation, whereby – and in summary – if their fire safety could not be ensured without removal and replacement of the ACM PE core cladding, then the responsible person under the FSO would have to do so.
330. Fourth, that post-Grenfell and prior to the entry into the current lease the question had been raised whether or not the cladding panels were made of category 3 ACM or solid aluminium and, after investigations conducted by WHL and subsequently LPC as owners, it had been reported by Clarke Banks as LPC's instructed consultants that it appeared that the cladding was solid aluminium and not category 3 ACM and, thus, did not represent a fire safety risk so that it did not require removal and replacement. It is, I think, readily apparent that if the true position had been known at the time, both parties would have known full well that it was inconceivable that Essendi would have elected to renew the lease without LPC agreeing to replace the cladding. They would also have understood that, unless and until it replaced the cladding, the intended use of the property as a hotel would have been rendered almost entirely nugatory. (At this point I am assuming, as I have already found, that both parties would have understood, objectively, that the true position was that LPC could not argue that Essendi was liable to replace the cladding by reference to the pre cut-off obligations arising under the original lease.)
331. Fifth, that although this was not made explicit, both Essendi and LPC would have known full well, given their respective business knowledge and expertise, that if it transpired that the cladding was category 3 ACM – which at the very least could not have been entirely discounted given the contents of the O&M manual which were known to both - and the Hotel could not be made reasonably fire safe without substantial external alterations being made, then the cladding would have to be removed and replaced at significant cost and, potentially at least, the Hotel decanted until that was done.
332. Sixth, that if neither Essendi as tenant nor LPC as landlord was to be responsible for whatever works were required under the current lease then – in the absence of a commercial resolution - the effect would be that the Hotel could not be operated and that would lead to potentially difficult questions as to the impact of such a stalemate under clauses 3.10.4 and 3.10.5 of the lease.
333. In this respect, Essendi argues that, if the landlord's repairing covenant is not to be construed in the way it contends that it should, that would leave a lacuna in the parties' respective obligations, so that work needing to be done to remedy an intolerable fire risk would be something which neither party was obliged to do and, hence, would be left undone and either (on its case) the Hotel would remain empty for the remainder of the lease or – as it would characterise LPC's case – the Hotel would stay open with some mitigations done but where there would still be a fire safety risk.
334. I agree that this final submission has some force in this case, whilst also noting that a similar submission was made and rejected in Beegas because, Lindsay J observed, it could not necessarily be assumed that the parties would have agreed to the result contended for.
335. As Lindsay J also observed, however, the Court of Appeal in Barrett v. Lounova (1982) Ltd [1989] 1 All ER 351 had reached a contrary conclusion on the basis of a similar inconsistency argument. Here, Essendi submits that there would be a similar outcome if no-one was responsible for replacing the cladding when set against Essendi's obligation to operate the premises as a hotel. Whilst in isolation I would not regard this point as determinative, it does in my judgment assist Essendi in its argument based on the other relevant factors identified above.
336. In my judgment, on an objective interpretation of the current lease as at the date it was entered into, having regard to the above identified relevant circumstances as known to both parties at the time, the landlord's repairing covenant ought to be construed as including an obligation to put and keep the building into that condition which, given the property's age, character and locality and, in particular, as a tower block exceeding 18 metres in height intended and required to be used as a hotel, would make it reasonably fit for such use as regards fire safety risks.
337. In short, in my view in the post-Grenfell period it ought to be the case that, where there is a multi-storey building providing accommodation in which people live and sleep (including, for present purposes, a hotel) an obligation entered into – at least post-Grenfell - to put and keep the premises in good condition would include an obligation to remove and replace cladding or to address some other inherent defect which: (a) creates a significant fire safety risk; and (b) requires remediation, both to make the building reasonably safe for occupation and to comply with the obligations imposed on the responsible person under the FSO. Of course, the question as to who ultimately bears that expenditure, the landlord as the person typically liable for the structure and exterior, or the tenants assuming there is a typical service charge provision, is a separate question, but it seems to me that as a matter of principle this interpretation ought to apply unless the relevant admissible facts point to a separate conclusion.
338. Further, this conclusion does not lead to the result that the same applies to every possible inherent defect, or even every possible safety related defect, in a property. It is all a question of fact and degree, and the particular recognition of fire safety risks post-Grenfell, exemplified by the passing of the Building Safety Act 2022, justifies this particular conclusion in this particular type of property.
339. Still further, it does not seem to me to be a sufficient answer, in the particular circumstances of this case, that there would be no breach unless and until there was some physical manifestation of the fire safety defect or some loss of amenity in consequence of that defect. It makes no sense in my judgment to impose such a limitation, especially in the context of a lease entered into post-Grenfell in relation to a similarly tall building intended and used for residential accommodation. Insofar as I need to decide the point, in my judgment there is no basis in this case for an application of any principle that remedying safety defects cannot fall within the scope of a good condition covenant because there is no liability without physical manifestation of the defect or loss of amenity caused thereby. In any event, in my judgment the evidence shows that once the fire safety defect is known there is a lack of amenity, since from that time onwards the Hotel cannot be used by Essendi as the tenant in the way in which it was plainly intended that it should be without the rectification of that fire safety defect by remediation works being carried out within a reasonable timeframe.

The landlord's legal obligations covenant.

340. The essential structure of the lease as regards legal obligations mirrors that of the repairing covenants, in that the general obligation is placed upon Essendi as the tenant and LPC's obligation as landlord is limited to the carrying out of works to the building other than the premises. However, as already explained, since the cladding forms part of the building but not part of the premises, it follows that if a legal obligation requires the carrying out of works to the cladding, then that falls within the scope of clause 4.6.
341. Further, although legal obligations are not expressly defined in clause 1, and the definition of legal obligations only appears under clause 3 (tenant's covenants) in clause 3.13.1, that definition must nonetheless apply as much to clause 4.6 as to clause 3.13 save insofar as the context indicates otherwise.
342. One issue which arises in this respect is that the definition of "legal obligation" in clause 3.13.1 refers to an obligation in relation to "the premises" or their occupation or use irrespective of the person on whom such obligation is imposed. If this definition was applied unaltered to clause 4.6 it would appear to result in what might seem to be the unintended consequence that LPC would only be liable in relation to a legal obligation applying to the premises, even though LPC has no repairing obligation in relation to the premises, as opposed to the building excluding the premises. This outcome, however, appears at first blush to be inconsistent both with the proviso in brackets in clause 3.13.2 and clause 4.6. I will return to this point below, after dealing with LPC's primary submission.
343. LPC's primary submission is that clause 4.6 does not contain words similar to those in clause 3.13.2, which expressly impose an express contractual obligation to "observe and comply with all legal obligations" (emphasis added). It submits that it follows that clause 4.6 only imposes an obligation in relation to the manner in which any works required by a legal obligation are to be carried out.
344. This is an important submission because, as Essendi accepts, unless the current lease can properly be construed as imposing a freestanding contractual duty on LPC as landlord, enforceable at the suit of Essendi as tenant, to carry out such works, it cannot identify a legal basis upon which it can assert a cause of action against LPC as regards its alleged failure to comply with its legal obligations under the FSO.
345. Essendi, however, submits that under the relevant terms of the lease as properly construed LPC is under a contractual obligation to comply with a legal obligation.
346. It submits that this is made clear by the combination of words in brackets in clause 3.13.2 (which, it argues, make clear that clause 4.6 relates to legal obligations which require the carrying out of works to the premises or the building) and the division of responsibility in relation to fire safety works in clause 3.13.4, where the landlord is under a positive duty to carry out works where "such legal obligations require works to the building or the premises for repair and maintenance of which the landlord is responsible pursuant to clause 4".
347. In my judgment the wording of clause 3.13.4 is important, because it does make clear that LPC as landlord is under a positive duty to carry out the works in question in the circumstances identified in that clause, i.e. where legal obligations require works to the building or the premises for repair or maintenance for which the landlord is responsible pursuant to clause 4. Notwithstanding that the duty appears in clause 3 rather than in clause 4, it nonetheless points to the parties having agreed, objectively, that there are circumstances in which the landlord is under a positive contractual duty to undertake works. In my judgment this makes it more likely that the parties had also agreed, objectively, that the landlord was under a positive contractual duty to carry out works in the particular circumstances identified in clause 4.6, rather than a lesser duty merely to do so in a "good and workmanlike manner (etc.)".
348. In conclusion on this point, in my view LPC's interpretation of clause 4.6 is unduly technical and attributes an unduly limited meaning to the words of clause 4.6 which is not sufficiently justified by the wording of the legal obligations provisions in the lease as a whole.
349. Returning to the point raised at the beginning of this section, if the definition of legal obligations in clause 3.13.1 is read literally, then given that the definition of the premises excludes the cladding, it would be necessary for Essendi to show that the legal obligation it relies on is one which is imposed on LPC and either "relates" to the premises or to "their occupation or use".
350. As already noted, this appears to be inconsistent with both the proviso to clause 3.13.4, which refers to the case where legal obligations require works to the building or the premises, and with clause 4.6, which refers to a legal obligation which requires the carrying out of works to the building other than to the premises for which Essendi is responsible under clause 3.4.
351. In the circumstances it does appear to me that these provisions, which are clearly intended to be read consistently with each other, are clearly inconsistent and that the most sensible conclusion is that clause 4.6 ought to be read on the basis that the legal obligation referred to is a legal obligation as defined by clause 3.13.1 but without the words "to the premises or their occupation or use" being read in.
352. If I am not right about this, then it would be necessary for Essendi to show that the obligation does relate to the premises or to their occupation or use. As will appear from my consideration of the FSO below, in my judgment it does, on the basis that the definition of relevant persons includes any person in the immediate vicinity of the premises who is at risk from a fire on the premises. If the relevant premises are the structure and the exterior, including the cladding, then it is the risk of a fire spreading across the cladding which creates a risk of fire to persons within the Hotel. Thus, the requirement is satisfied even on this interpretation.
353. It is also convenient at this point to address a submission made by LPC to the effect that "absent explicit language, a covenant to comply with the provisions of statutes etc. does not have the effect of turning statutory duties into duties actionable by a landlord or a tenant (as the case may be)".
354. Reliance is placed on what HHJ Keyser QC (sitting as a Judge of the High Court) said in Pullman Foods v The Welsh Ministers [2010] EWHC 2521 (TCC), a case which concerned a licence which imposed an obligation on the claimant licensee to "comply with all laws". The defendant licensor alleged that the claimant had breached numerous obligations under the Control of Asbestos Regulations 2012 and that each such breach constituted a breach of this contractual obligation. The defendant incurred costs of approx. £1.4 million remediating asbestos contamination and sought to recover those costs from the licensee.
355. Judge Keyser said at par. 177(6) that: "It is true that the obligation relied on by the Welsh Government is a contractual obligation to comply with the law; the claim is not directly brought for breach of statutory duty. But I do not consider that that the contractual provisions have the effect of turning the statutory duties into the equivalent of duties actionable by the Welsh Government; for that, much more explicit provision would be needed".
356. Essendi does not contest the general principle or the correctness of the application of the principle to the facts of that particular case. However, it submits that the provisions relied upon in this case are sufficiently clear and explicit to make the statutory duties actionable under the current lease. I agree. Whilst I have already addressed the particular issues of interpretation at some length, I have concluded that in the end these provisions are clear and explicit. Indeed, LPC could scarcely argue otherwise in relation to clause 3.13.1 and 3.13.2 (which are in LPC's favour) and the only reason why I have needed to spend more time on clause 4.6 is because of what I am satisfied is the failure of the drafter to make sufficiently clear mirrored provision so far as LPC's obligations as landlord are concerned.
357. Finally, even if that was the case and Essendi could not show this, then in my judgment clause 3.13.4 imposes a specific and freestanding positive contractual duty upon LPC in the circumstances there identified, which are where the works required are ones of repair and maintenance for which LPC is responsible under clause 4.3. Given the conclusions I have reached as to the proper interpretation of the clause 4.3 repair and maintenance provisions, this would apply here in any event as well.

I. Issue 1 – the claim under the good condition covenant.

358. Given the above conclusions, and given my findings in relation to the first core issue addressed above, it is clear in my judgment that the obligation to put and keep the cladding in good and substantial condition has been breached where, as the fire safety experts agree is the case, and as I find, the cladding is comprised of category 3 ACM cladding panels which represent an intolerable fire risk and has the result that the Hotel cannot be kept open and operated safely beyond the short term.
359. Further, as a matter of fact, the cladding did not comply with the relevant provisions of the Building Regulations 2010^[5] as at the date of the lease (which as relevant reproduced the previous Building Regulations 2000) because it did not in fact comply with paragraph 13.7 of ADB 2000, since the panels provided a medium for fire spread which was likely to be a risk to health and safety and, thus, did not demonstrate compliance with regulation B4(1) of the Building Regulations 2000 then in force^[6]. Insofar as relevant, by the date of the current lease that was also the position as would have been known to competent architects and designers, as the experts agree.
360. Although this is a statement of the obvious, I should make clear that the good condition covenant is a strict liability obligation, so that it is irrelevant – even if it was the case – that LPC did not actually know in March 2019 that the cladding was category 3 ACM.
361. Further, although the cladding experts had agreed in their joint statement (par. 15) that the ACM cladding panels are in good and substantial repair and condition, it is apparent that they were not referring to their condition in the sense described above, as opposed to their physical condition.
362. In its closing submissions, LPC advanced two particular reasons why, even if a breach was established, it did not follow that the cladding should be removed and replaced with non-combustible materials.
363. The first is that the requirements of the "reasonably minded tenant" can be ascertained by reference to the requirements of the actual tenant, i.e. Essendi. Since the actual tenant installed the cladding in question and then took the original lease and the current lease with the cladding in place, there is no reason to suppose that the reasonably minded tenant would require any different cladding system. However, as Essendi submits: (a) there is no basis in the authorities or otherwise for equating the position as known to the tenant at the time as being the requirements of a reasonably minded tenant; (b) the evidence in this case makes clear that as at the date of the original lease and as at the date of the current lease Essendi did not in fact know that the cladding as installed was category 3 ACM cladding panels; (c) in my view, it is clear on the evidence that any reasonably minded tenant would have required the existing cladding to be replaced by non-combustible cladding panels as at the date of the current lease, had they been aware of what the existing cladding actually comprised. There is no cogent basis for a submission, even if it was relevant, that Essendi would have elected to enter into the current lease on the contracted terms even if it had been informed that the cladding comprised highly combustible cladding panels, let alone if it had also believed that by doing so it would lose any claim it might otherwise have to seek to compel LPC to replace the existing cladding with non-combustible cladding panels.
364. The second argument advanced by LPC is that the wholesale removal and replacement of the cladding panels is outside the scope of the repairing covenant altogether for a number of reasons.
365. The first reason advanced is that the current lease is said to be for a relatively short contractual term. However, I do not myself regard a twelve-year lease as being a relatively short contractual term, even leaving aside the contractual right to renew for two further twelve-year terms, which seems to me to be a material consideration in this regard. Nor, in any event, does this point seem to me to be particularly relevant in the context of the defect in question, i.e. a serious fire safety risk.
366. The second reason is that the cost of the proposed remedial works will be significant, anywhere between £5 – 7 million, compared with a turnover rent of 22% of turnover, which LPC cannot recover under the service charge provision. However, the evidence indicates that the rent payable has been in the region of £1 million p.a. which, over a 12-year term, let alone a potential 36 year overall length from the date of the current lease, produces a very substantial fund from which remedial works may be financed. In any event, in my view the cost is not a particularly relevant factor in the context of a serious fire safety risk which the fire safety experts agree cannot be left in place, at least beyond the short term (in Mr Van Gorp's opinion). Further, since it is extremely unlikely that any incoming tenant would agree to take a lease of the Hotel without the cladding being replaced, it is a cost which LPC is going to have to incur if it plans to retain the Hotel building and to allow for if it does not. Finally, if a landlord enters into what it may now appreciate was a bad bargain, by agreeing not to recoup this expenditure by way of service charge, that does not seem to me to be a sufficiently good reason for relieving him of his obligation, freely entered into.
367. The third is the estimated duration of the works. However, again that does not seem to me to be particularly relevant in the context of a serious fire safety risk. Further, in the context of a 12-year lease with a contractual right of renewal, the overall duration of the works (as to which there is some dispute but – if one excludes the planning, design and procurement process which will not impact on the use of the hotel – is likely measured in months not years) is not of any great significance nor, of course, will it affect LPC as landlord in any event.
368. The fourth is the submission that, since the condition of the Hotel building now is materially the same as it was as at the date when the current lease was granted, the wholesale removal and replacement of the existing cladding panels will give Essendi something completely different to that which was demised to it when the current lease came into existence. However, in my judgment it is only different in the context of the replacement of highly combustible cladding panels with non-combustible panels. That is not the same as, for example, significant improvements which would provide the tenant with a different quality of building from which it would directly benefit in the same way as would, for example, completely upgrading the heating and ventilation or electrical installations.

The cavity barriers and closers

369. A separate issue arises in relation to the alleged absence of cavity barriers and closers.
370. In its opening submissions LPC argued that there was no satisfactory evidence as to the extent of the missing cavity barriers and closers and, in any event, that this could not amount to a breach of the repairing covenant, given the evidence that insofar as they are absent they have always been absent.
371. In its closing submissions Essendi noted that it had not addressed this as a separate point because the fire engineers had agreed that from a risk perspective, the cavity barriers / closers do not in fact require remediation.
372. However, in its opening submissions LPC also advanced a further submission that the cavity barriers / cavity closers are located within the cavity between the internal wall and the cladding panels, which is part of the definition of the "conduits" which are within Essendi's demise. Thus, it followed, that not only are these not LPC's responsibility, but they are Essendi's responsibility, and that "if the cavity barriers and cavity closers require remediation, then Essendi should bear the cost of removing and replacing the Cladding Panels in order to access the cavity barriers and cavity closers".
373. In its closing submissions Essendi addressed this submission in three ways, each of which I accept.
374. The first is that, unlike the position in relation to the category 3 ACM cladding panels, there is no evidence that the absence of these barriers creates fire safety risks such that their original omission amounts to a failure to put or keep the landlord's retained premises in good condition. Thus, they do not, as the experts agree, require any works anyway.
375. The second is that this cavity between the masonry structure (concrete frame and infill blockwork) which forms the exterior of the Hotel rooms and the cladding panels cannot in my view be described as a "duct or flue for the passage of air or any other substance", so that it cannot fall within the definition of a conduit. Alternatively, even if it could be said that they were, the position of this cavity as separating the outer face of the internal wall and the internal face of the cladding panels, both of which are within the landlord's retained parts, must mean in my view that they do not fall "wholly within the premises" so as to satisfy the definition of conduits.
376. The third is that, even if LPC could surmount these obstacles, the argument that since in order to retro-fit these barriers the cladding panels would have to be removed anyway it must follow that LPC should not be liable to bear the cost of that exercise is misconceived. That is because: (a) LPC is still responsible for the removal and replacement of the cladding panels under the good condition covenant, and it is irrelevant that – on this hypothesis – they might have to be removed anyway to replace the cavity barriers and closers; (b) even if there was any merit in this submission, then by an application by analogy of the effective cause principle which I discussed in Martlet, LPC could not escape liability for the cost of the replacement of the cladding panels by arguing that this would need to be done anyway to retro-fit the barriers. Instead, it would be a straightforward case for an apportionment of the relative cost of both works.

The western elevation.

377. As already stated, from around 2019 onwards there has been left a gap of some 50cm between the Hotel building and the new Peabody property, with no flashing or other protection between the two to prevent water penetration into that gap or detritus building up in the gap, including detritus which might present a fire risk.
378. Mr King accepted in cross-examination that it was not reasonably practicable to clad the area between the two buildings where it had previously not been clad. He also accepted that if the flashing was replaced precisely as it was before the demolition of the previous building and the erection of the new building that would achieve only a limited purpose, given the differing position both vertically and horizontally of the present compared with the former building. The obvious answer, of course, would be to replace the old flashing with new flashing which fits the new dimensions of the present building.
379. That would of course require the consent of Peabody. In a letter written by its solicitors shortly before trial, Peabody indicated that it was willing to consent not only to the removal of the existing cladding but also thereafter to closure of the gap between the two buildings, subject to the agreement of reasonable terms for access etc.
380. In closing submissions, Essendi invited the court to make an order requiring LPC to use all reasonable endeavours to negotiate a licence with Peabody to permit the sealing of the gap with flashing.
381. In my judgment, LPC's obligation under the repairing covenant, in circumstances where otherwise there would be no sufficient protection for the relevant part of the western elevation, extends this far and I do not accept its objection that doing so is an unjustifiable extension of its strict obligations under the good condition covenant.

J. Issue 2 – the claim under clause 4 and the Fire Safety Order.

382. In submissions, both parties have taken me in some detail through the provisions of the Regulatory Reform (Fire Safety) Order 2005 - the FSO. It appears that there is no previous decided case at High Court level as to its application in circumstances such as the present. However, as I have said, I have resisted the temptation to produce a lengthy comprehensive summary or analysis of its terms. What I say about the FSO is not intended to go beyond what is necessary for me to decide for the purposes of this case.
383. By way of introduction and summary, at the time when most of the FSO came into force on 1 October 2006 it was the principal piece of legislation governing fire safety in buildings in England and Wales. As relevant to this case, it imposes duties on the "responsible person" to undertake and record a fire risk assessment and to put in place and maintain such general fire precautions as may reasonably be required in the circumstances of the case to ensure that the building is safe for persons on the premises or in its immediate vicinity, including taking measures to reduce the risk of fire on the premises and the risk of the spread of fire on the premises. It also imposes a duty to replace dangerous substances so far as reasonably practicable with a substance or process which either eliminates or reduces the risk to relevant persons.
384. The Recitals record that: (a) the First Secretary of State considered it to be appropriate to make the FSO following consultation with a number of specified bodies and persons; (b) the proposals were laid before Parliament "as required by section 6 of the Regulatory Reform Act 2001 and the period for Parliamentary consideration under section 8 of that Act expired"; (c) the Secretary of State has regard to the representations made within that period; (d) the draft FSO was then laid before and approved by Parliament; (e) the Secretary of State was of the opinion that the creation of burdens by the FSO struck a fair balance between the public interest and the interests of the persons affected by the burdens.
385. I have referred to these Recitals because it is submitted by LPC that the Regulatory Reform Act 2001 ("the RRA 2001"), pursuant to which the FSO was made, had the stated purpose of "reforming legislation which has the effect of imposing burdens affecting persons in the carrying on of any activity and to enable codes of practice to be made with respect to the enforcement of restrictions, requirements or conditions", so that if the FSO is to be construed as imposing new burdens then it would run contrary to the stated purpose of the Act under which it was expressly authorised to be made.
386. I do not accept this submission. That is because s.1 RRA 2001 expressly conferred the power upon a Minister of the Crown to be exercised with a view to the object of "the making of new provision having the effect of imposing a burden which— (i) affects any person in the carrying on of the activity, but (ii) is proportionate to the benefit which is expected to result from its creation". Thus, it cannot be argued that the RRA 2001 could never be relied upon to make an order which imposed a burden. There was such a power, so long as it was proportionate to the expected benefit. That proportionality assessment was plainly one for the Minister in question to make and there is no basis for my being invited, still less to acceding to any invitation, to conclude that it was one which could not reasonably have been reached.
387. Further, as explained at par. 40 of the Explanatory Notes to the RRA 2001: "For example, the power could be used to simplify and rationalise the legislation governing fire safety, which is enshrined in approximately 120 Acts of Parliament and a similar number of statutory instruments. Where a burdensome situation results from such a variety of overlapping regimes, perhaps spread over primary legislation and secondary legislation (including different sets of regulations), the order could replace the entire range. The result would be the repeal of the legislation and new provision in what might be known as, for example, the Regulatory Reform (Fire Safety) Order. The confusion created by the variety of different provisions could be removed".
388. It follows that even if the FSO does impose a new burden on responsible persons in relation to fire safety obligations, since the benefits of making an order in similar terms to the FSO as subsequently made were expressly flagged up in the explanatory notes, it cannot be objected that because it also introduces burdens the making of the FSO is outside the permitted purposes envisaged by the RRA 2001, so that neither the FSO nor the contract in question should not be construed as having that effect.
389. Having dealt with that preliminary objection, I shall consider first the duties owed by LPC under the FSO and second the relevant provisions as regards enforcement.

The duties owed by LPC under the FSO.

390. I will deal with this by reference to the relevant questions which arise.

Is LPC a responsible person under art. 3 and, if so, in relation to which part/s of the Hotel building?

391. Subject to certain exceptions, the FSO applies in relation to any "premises" (art.6(2)). The expression "premises" is widely defined in art.2 as including: "… any place and, in particular, includes – (a) any workplace; …; (c) any installation on land …". There is no definition of a "place", but it is an ordinary word in common use. A premises can form "part of a building" (art. 17(2)).
392. Originally, art. 6 provided that the FSO did not apply to "domestic premises" (defined as "premises occupied as a private dwelling" but excluding any parts in common use). However, art.6 was subsequently amended by operation of s.1 of the Fire Safety Act 2021 (the "FSA 2021") - enacted following the Grenfell Tower fire - so that the new art. 6(1A) expressly extends its application to the structure, external walls, common parts and doors leading to common parts of buildings containing two or more sets of domestic premises. Since it has never been suggested that a hotel room could fall into the category of premises occupied as a private dwelling, it cannot be suggested that before 2021 the FSO did not apply to the whole of the Hotel building.
393. However, LPC has submitted that "self-evidently, these amendments would have been unnecessary if a "building's structure and external walls" fell within the definition of "premises". I am unable to agree with this submission. As Essendi submits, these amendments were to clarify what was, post the Grenfell fire, an important issue, namely the extent to which the FSO applied to the common parts of residential tower blocks. Even before the amendment the definition of domestic premises did not in my view exclude the possibility that either the structure and exterior of a building including self-contained domestic premises, or the common parts identified in the definition of commercial premises, could not fall within the definition of "premises" or could not sensibly be described as a "place".
394. Art. 3 identifies the relevant person in relation to any premises by reference to a descending hierarchy. In the first place, if the premises is a workplace, it is the employer. Here, by reference to the definition of the workplace and the employer, it is common ground that Essendi as the employer of its employees at the Hotel would be the responsible person. However, because of the definition of a workplace as meaning "any premises or parts of premises, not being domestic premises, used for the purposes of an employer's undertaking and which are made available to an employee of the employer as a place of work" (underlining added), that would not extend to the structure or exterior of the Hotel building.
395. In relation to the structure and exterior, the second place in the hierarchy would be "the person who has control of the premises (as occupier or otherwise) in connection with the carrying on by him of a trade, business or other undertaking (for profit or not)". In my judgment it is plain, by reference to the terms of the current lease, that LPC has control of the structure and exterior, including the cladding, in connection with the carrying on of its trade, business or undertaking.
396. The third and final place in the hierarchy, which only applies where the person in control of the premises does not have control in connection with the carrying on by him of a trade, business or other undertaking, is the owner of that part of the premises. Again, this would be LPC.
397. It is also worth noting that, even if the whole of the Hotel building constituted one premises, then it would follow by reference to art. 3 that LPC would still be the person who has control of the premises where, on this hypothesis, the premises would mean the Hotel building but excluding that part of the Hotel building which comprises the workplace.
398. Finally, even if LPC was not the responsible person in relation to the structure and exterior, by reference to art. 5 it would nonetheless be a person in control of the premises to the extent of its obligations under the current lease in relation to the maintenance, repair and safety of the premises.
399. As LPC submits, under the original lease the position would have been different under art. 5 in relation to the cladding, given that Essendi was under a repairing obligation in that respect.
400. It may also be said that even under the current lease LPC would not have any obligations under art. 5 in relation to the remedying of inherent defects with the cladding, assuming I am wrong as to the extent of the good condition covenant. This raises the question as to what would happen in such a case? It appears to me that the structure of the FSO envisages that a person such as LPC may be a responsible person under art. 3(b)(i) as the person with control of the cladding, even though it would not separately be treated as a person with control under art. 5(4) because of the proper interpretation of the good condition covenant.
401. That does not seem to me to create any difficulty in principle, since the purpose of art. 3 is to ensure that there is always someone who is a responsible person in relation to premises, and the purpose of art. 5 is to ensure that someone else who also has a contractual or tenancy obligation in relation to some or all of that premises should also be treated as a responsible person to that extent. If, to take a possible hypothesis from the facts of this case, LPC was the responsible person under art. 3(b)(i) even though, on this hypothesis and contrary to my actual findings, it was not a person in control under art. 5 because it did not have obligations in relation to the maintenance, repair and safety, all that this would mean is that it could still be the subject of action under the FSO where that was appropriate. That is a perfectly rational solution to a problem of ensuring fire safety. It would not prevent that person seeking to recover the cost of compliance from the party who did have such obligations.

What duties does LPC owe as a responsible person in relation to the cladding?

402. As relevant to this case, the principal obligation arises under art. 8 and includes a duty under art. 8(1)(b) "in relation to relevant persons who are not his employees, [to] take such general fire precautions as may reasonably be required in the circumstances of the case to ensure that the premises are safe". This is a less onerous duty than that owed to the employees of the responsible person, where the duty is to take such general fire precautions as will ensure, so far as reasonably practicable, the safety of any of his employees. It is still however a duty to take precautions to ensure that the premises are safe, albeit that: (a) the obligation is only to do what is reasonably required; and (b) safety is defined to mean the safety of persons in respect of harm caused by fire, so that it does not include physical damage to the premises in question, still less economic damage to the owner of the premises or any business carried on from the premises.
403. The definition of relevant persons includes by (a) "any person … who is or may be lawfully on the premises". On the basis that here the premises in question are limited to the structure and exterior of the building, this could only include persons undertaking inspections, maintenance or repair of those parts. Understandably, this is not relied upon by Essendi. However, the definition also includes by (b) "any person in the immediate vicinity of the premises who is at risk from a fire on the premises". This must in my judgment include guests staying at the Hotel, Essendi's employees working at the Hotel, anyone else visiting the Hotel, and anyone living or working at or visiting any adjacent properties who, objectively, could be regarded as being at risk from a fire on the external parts.
404. LPC has submitted that the immediate vicinity (b) category only includes a person who is at risk from a fire on the premises, and not (as in the former (a) category) those who are or may be at risk. In my judgment the reference to "is or may be" in category (a) refers to the lawfulness of their presence on the premises and cannot be used to support a submission that a person in the immediate vicinity of the premises who may be at risk from a fire on the premises is not owed a duty. It cannot sensibly have been intended in my view that the definition of a relevant person could depend on some fine legal analysis of the difference in foreseeability between a person who is at risk and a person who may be at risk, especially given that the circumstances in which a fire may start and spread are so infinitely variable.

What is LPC as a responsible person required to do by way of general fire precautions?

405. Art. 4 refers to six matters, the first being "(a) measures to reduce the risk of fire on the premises and the risk of the spread of fire on the premises". Again, in the context that the relevant premises are the structure and exterior of the building, including the cladding, that would involve taking such measures to reduce the risk of fire and of the spread of fire on the premises as may reasonably be required in the circumstances of the case to ensure that the premises are safe.
406. Art. 10 requires a responsible person to implement any preventive and protective measures on the basis of the principles specified in Schedule 1 Part 3. The principles include: (a) avoiding risks; (b) evaluating risks which cannot be avoided (c) combating the risks at source; (d) adapting to technical progress; and (e) replacing the dangerous by the non-dangerous or less dangerous.

The alternative duty owed by LPC assuming that it was not the responsible person but had control of the structure and exterior including the cladding or any obligation in relation to the maintenance, repair or safety of it?

407. Further, by virtue of art. 5, in a case such as this even if LPC was not the responsible person it would still fall under the same duties as imposed on the responsible person, but only assuming that I am right as to the scope of the good condition covenant, on the basis that under the current lease it has control of the structure and exterior including the cladding and obligations under the lease in relation to the maintenance, repair or safety of it.

Other duties arising under the FSO on the responsible person (as well as any person with control)?

408. Under art. 9 the responsible person has a duty to carry out a risk assessment and to review it regularly so as to keep it up to date.
409. Essendi accepted in submissions that even though it contends that this duty was breached by LPC in this case, in that there is simply no evidence of any risk assessment ever having been carried out by LPC at any stage, that would not achieve any substantive outcome by itself, because it would still be necessary to consider the causative consequences of this, i.e. what would a competent risk assessment have identified in terms of the "general fire precautions he needs to take to comply with the requirements and prohibitions imposed on him by or under this Order" (which is the stated purpose of the risk assessment).
410. There are also specific duties imposed for example under art. 13 in relation to the provision of appropriate and accessible fire-fighting and fire detection equipment and art. 14 in relation to emergency routes and exits as well as maintenance under art. 17. I refer to these provisions not because they are relevant to this case, but because they demonstrate that the FSO imposes a number of general and a number of more specific obligations, which belies the submission made by LPC (closing submissions at par. 238) that the FSO is 'goal setting' rather than prescriptive.

Can the cladding be regarded as a dangerous substance?

411. Essendi relies upon art. 2(c), which includes within the meaning of a dangerous substance "a substance or mixture which because of its physico-chemical or chemical properties and the way it is used or is present in or on premises creates a risk".
412. This therefore requires the court to consider both the properties of the substance and the way it is used or present in or on premises.
413. It cannot seriously be contested that the flammable nature of the category 3 ACM cladding panels satisfies the first limb of the requirement.
414. As to the second, LPC submits that cladding cannot be regarded as being present "in" or "on" the relevant premises where the cladding forms part of the premises themselves. I do not accept this submission. As a matter of the ordinary meaning of these words a dangerous substance which is incorporated into an installation of land (part of the definition of premises, see above) would be regarded as being "in" the premises. Given that the relevant premises are, on my analysis, the structure and exterior of the Hotel building (or alternatively the Hotel building as a whole) this second requirement is also satisfied.
415. Finally, looking at the requirement as a whole, it is plain from the evidence that the category 3 ACM cladding panels create a risk to the safety of persons from fire, given the evidence that due to their flammable nature they create a risk of fire and/or a risk of the spread of fire. It is difficult to see, given the evidence from Grenfell and the conclusions of the Grenfell inquiry, how the contrary could sensibly be argued. I was referred to what the Grenfell Tower Inquiry: Phase 1 Report said in relation to ACM panels with a PE core, at §§2.13, 6.13 and 23.4, namely:

"2.13. (a) The principal reason why the flames spread so rapidly up, down and around the building was the presence of the aluminium composite material (ACM) rainscreen panels with polyethylene cores, which acted as a source of fuel. The principal mechanism for the spread of the fire horizontally and downwards was the melting and dripping of burning polyethylene from the crown and from the spandrel and column panels, which ignited fires lower down the building. Those fires then travelled back up the building, thereby allowing the flame front to progress diagonally across each face of the tower.

6.13. Polyethylene is a combustible synthetic thermoplastic polymer which melts and drips on exposure to heat. It can flow whilst burning and generate burning droplets. It has a high calorific value compared with other common construction materials and will provide a fuel source for a growing and spreading fire. It melts at 130-135°C and ignites at around 377°C.

23.4. In Professor Bisby's opinion the most important factor by a considerable margin in the rapid spread of fire vertically (and the spread of fire across the exterior of the building more generally) was the presence of ACM panels with a polyethylene core. In his view the evidence strongly supported that conclusion and in reaching it he emphasised the characteristics of polyethylene, including its high calorific value (when compared with other common construction materials, including those used at Grenfell Tower), providing an ideal fuel source for a growing fire. It is a highly flammable synthetic thermoplastic polymer which has a heat of combustion similar to that of petrol or diesel fuel."

416. I note that Mr Van Gorp accepted in cross-examination that PE core ACM panels on the Hotel building and the way they were used on it created such a risk.
417. In my judgment there is no basis for the argument apparently advanced by Mr Van Gorp in his report that the definition of dangerous substances ought to be given a restricted meaning, whether to be limited to flammable liquids or gasses, combustible dusts or oxidising agents as he suggested or to intrinsically hazardous, explosive, corrosive or poisonous substances, as might be argued by reference to the wording of art. 2. Sub-paragraph (b) of the definition in art. 2 is in my view deliberately cast in wide terms, in contrast to the more restricted categories in (a) and (c), and there is no good reason to read (b) as implicitly intended only to apply to substances directly analogous to those falling into those two categories. Further, the definition of "hazard" expressly refers to the "physico-chemical or chemical property of that substance which has the potential to give rise to fire affecting the safety of a person", so that it is apparent that fire safety was always regarded as an important part of the obligations imposed under the FSO in relation to dangerous substances and more widely.

What additional obligations apply if the cladding can be regarded as a dangerous substance?

418. Under art. 9, certain additional matters must be considered in any risk assessment, but there is nothing in these – appearing in Part 1 of Schedule 1 – of obvious significance so far as this case is concerned.
419. Under art. 12(1) "Where a dangerous substance is present in or on the premises, the responsible person must ensure that risk to relevant persons related to the presence of the substance is either eliminated or reduced so far as is reasonably practicable".
420. Under art. 12(2) "In complying with his duty under paragraph (1), the responsible person must, so far as is reasonably practicable, replace a dangerous substance, or the use of a dangerous substance, with a substance or process which either eliminates or reduces the risk to relevant persons".
421. Thus, if it is reasonably practicable to eliminate the risk related to the presence of the category 3 ACM cladding panels by replacing them with non-flammable cladding panels, then that is what LPC is required to do.
422. In my judgment LPC has not adduced any evidence or credible basis for submitting that it is not reasonably practicable to replace the category 3 ACM cladding panels with non-flammable cladding panels.
423. In its submissions LPC argues that since the "substance" which Essendi contends is dangerous is limited to the "polyethylene core" of the cladding panels it is not "reasonably practicable" to eliminate or reduce the presence of this substance, because it is sandwiched between two aluminium sheets, and because there is no way to remove the core from between the sheets.
424. Whilst strictly speaking there is no evidence adduced by LPC to this effect, I am prepared to accept that this is so and that in reality the only reasonably practicable solution is to replace the cladding panels in their entirety. However, in my judgment, with respect to the submission that this means that art. 12(2) is not engaged, I reject it on the basis that it is too restrictive a reading of art. 12(2). Replacing a dangerous substance cannot in my judgment be read as replacing only the dangerous substance and nothing else. This has some similarity to the argument successfully advanced by Portia in the Merchant of Venice. In my judgment it should however be rejected as an elevation of literalism over substance. If it is not reasonably practicable to replace the polyethylene core without replacing the aluminium sheets in which it is encased, in circumstances where the cladding panels are manufactured and supplied as a composite item, it is reasonably practicable to replace the whole cladding panel. Art. 12(2) is subordinate to art. 12(1), which requires that the risk is either eliminated or reduced so far as is reasonably practicable. Art. 12(2) should be read widely on that purposive basis in my judgment. Nothing in a sensible reading of art. 12(2) would compel a contrary conclusion. It follows in my judgment that this is what LPC is required to do under the FSO unless there is some other basis for contending that it is not so required.
425. Further, and even if LPC could establish that it was not reasonably practicable to replace the cladding panels, then by Part 4 of Schedule 1 and the order of priority contained there, it was required to reduce the quantity of dangerous substances to a minimum. LPC has not adduced any evidence that it could not do so by replacing the cladding panels.

What if any works is LPC required to carry out under art. 8 (general fire precautions)?

426. As LPC notes, in its pleaded case Essendi refers to the works required as cladding remediation works and to the removal and replacement of all the category 3 ACM cladding panels.
427. LPC's detailed case as to why it ought not to be required to do so under art. 8 appeared from its detailed closing submissions at pars. 382 ff, which I have already addressed above and rejected and which I do not need to repeat here.
428. LPC also submitted that the duty to which it is subject under art. 8(1)(b) is only owed to relevant persons and, since the closure of the Hotel, that could only include the skeleton staff maintained by Essendi at the Hotel and the occupants of the adjacent building. The submission is that in the absence of occupation by guests the risks which Mr Bullock is so concerned about do not arise and, thus, there is no basis under the FSO for the category 3 ACM cladding panels to be removed and replaced.
429. However, I am concerned not only with the position as it is now but also the position as it was at the date of issue of proceedings, when the Hotel was fully occupied, as well as the position for the future. It cannot be the case that if a premises is evacuated due to justified and urgent fire safety concerns the duty under the FSO is immediately extinguished. It is necessary to take a wider temporal view of matters.
430. A further point made by LPC on art. 8 was that the reference to the circumstances of the case would, in this case, include the rights and obligations of the parties under the current lease. On that basis it was submitted that to expect LPC to replace the category 3 ACM cladding panels in their entirety would override the terms of the lease as regards repairing obligations.
431. In my judgment, however, this is not a point of any, alternatively any great, weight in the context of the application of the FSO. That is because the FSO is concerned with the safety of relevant persons rather than the adjudication of disputes as between landlords and tenants. If, as I have found, LPC is the responsible person in relation to the cladding and if, as I have found, what is reasonably required in the circumstances of the case to ensure that the premises are safe for such persons is the removal of the category 3 ACM cladding panels, then it does not seem to me to be a material consideration that this may operate to LPC's disadvantage as compared to that of Essendi.
432. Even if I was wrong to find that LPC has a good condition obligation to replace the cladding panels under the current lease, as I have concluded that does not mean it cannot be liable under the FSO as the responsible person and, as I consider below, under the legal obligations covenant. If so, then nonetheless since there is no basis for concluding that Essendi would be liable to replace the cladding panels under the good condition covenant or under the legal obligations covenant under the current lease even if LPC was not liable to do so, there is no necessary or insuperable inconsistency in Essendi being able to enforce a liability under the legal obligations covenant against LPC even if it could not do so under the good condition covenant. That difference would simply reflect the different contractual bargain under the two separate covenants, so that instead of a situation where no-one is liable to replace the cladding panels LPC is liable to do so under the FSO and the parties have agreed that Essendi can enforce this obligation under the legal obligations clause even if it cannot do so under the good condition covenant.

Does the general structure of the enforcement regime under the FSO prevent Essendi from bringing a claim under the legal obligations covenant for breach of the FSO?

433. This is a key plank of LPC's case as regards the claim under the FSO.
434. LPC's starting point is art. 39, entitled "civil liability for breach of statutory duty", which provides that subject to par. (2) (which applies only to claims by employees against their employers), "…nothing in this Order is to be construed as conferring a right of action in any civil proceedings".
435. Essendi fully acknowledges that art. 39 prevents it from relying directly on any alleged breach of the FSO by LPC, which is why it has to - and does - rely on the legal obligations covenant to make good its claim in relation to the obligations imposed by the FSO.
436. Thus, the question is whether the wider enforcement regime and context in which the FSO came into being should lead to the conclusion that even if the current lease does, on its true interpretation, impose a contractual obligation on LPC to carry out works required by a legal obligation, that contractual duty cannot or should not be enforced by the court in a civil claim such as the present.
437. Enforcement is dealt with in Part 3 of the FSO. It provides for enforcement to be undertaken by the fire and rescue authority ("FRA") for the area in question, which is under an obligation to do so and to have regard to guidance given by the Secretary of State when doing so (issued under reg 50). It may serve alterations notices, enforcement notices and prohibition notices in respect of the premises where it is of the opinion that the criteria specified for doing so are met. It provides that it is an offence for any responsible person or person with control to fail to comply with any requirement or prohibition imposed by the fire safety duties imposed by arts. 8 to 22 or with any alterations or enforcement notice. This is subject to a general defence of "all reasonable precautions" and "all due diligence" (save in relation to certain specific exceptions, one of which relates to dangerous substances). There is a right of appeal to the magistrates' court (and onwards to the Crown Court) against alterations notices, enforcement notices and prohibition notices. There is also a provision for the Secretary of State to determine any disputes as to what remedial measures are required to comply with the FSO, but only with the agreement of the enforcing authority and the responsible person or person with control.
438. LPC contends that: (a) the FSO contains a comprehensive statutory scheme, which expressly ousts private law rights; (b) enforcement is left to nominated enforcing bodies and, ultimately, the criminal courts.
439. In my judgment this overstates the position. The statutory scheme does not expressly oust private law rights. Art. 39 simply states that the FSO should not be construed as conferring a civil right of action. Nor does the FSO expressly state that the duties imposed by the FSO may only be enforced by the FRA or other nominated enforcing authorities. It does provide that the enforcing authorities are obliged to enforce the provisions of the FSO and regulations made under the FSO, and it gives the enforcing authorities powers in relation to such enforcement, but it does not expressly state that enforcement by any other person or means is prohibited.
440. Further, the unconstrained right of appeal to the magistrates' court against alterations etc. notices would require the magistrates' court to decide for itself whether or not a notice should be cancelled or affirmed with or without such modifications as it thinks fit (art. 35(2)). In other words, this right of appeal would require a court to make its own decision as to what, objectively, a person subject to the FSO should be required to do to comply with the FSO in the particular circumstances of the case.
441. In my opinion this framework is very different in nature to what LPC describes as the elaborate scheme of statutory regulation, which included a complaints procedure to an independent regulator with powers of enforcement, whose decisions were subject only to judicial review by the courts, which was under consideration in the case of Marcic v Thames Water Utilities Ltd [2004] 2 AC 42, where the House of Lords held that to allow a cause of action by a private houseowner in nuisance would be inconsistent with the statutory scheme.
442. Further, as Essendi submits, nothing in Marcic or the other cases referred to by LPC supports the proposition that in such a case parties cannot expressly agree by contract that one party should comply with the obligations imposed by a statutory instrument such as the FSO or that the court should not permit a party to invoke the remedies available under the law of contract against a party who did not comply with such obligations.
443. It may well be that, in relation to other instruments, a court would hold that the obligations imposed were so general or non-prescriptive, or that the powers available to the enforcing authority were so widely-defined, that the court could not conclude with any confidence either what was, or was not, a breach of the contractual obligation to comply with the instrument or what remedy or remedies could properly be granted as a matter of contract. However, for the reasons I have already given, neither argument can in my judgment credibly be submitted as regards the FSO in this case.
444. LPC also submits that although the legal obligations covenant refers to a legal obligation which "requires the carrying out of works to the Building", the relevant provisions of the FSO do not refer to or require works to be carried out. I do not accept this submission. The obligation imposed by art. 12 plainly envisages the carrying out of works to replace a dangerous substance which is present in or on the premises. Further, the duty to take general fire precautions in art. 8, and the principles of prevention identified in Sch. 1 Part 3 as regards the implementation of "preventive and protective measures" in art. 10, plainly also envisage that works may be required (see in particular (e) – replacing the dangerous by the non-dangerous or less dangerous). The maintenance obligation in art. 17 also envisages that works of maintenance be carried out.
445. It is also worth noting that clause 3.13.4 of the current lease specifically refers to "all legal obligations of any appropriate authority relating to health and safety means of escape in case of fire and the protection and preservation of life and property" and imposes obligations on both the tenant and the landlord in that respect. It would be a strange outcome if this clause, which plainly contemplates legal obligations arising under the FSO, was not to be given its plain intended effect.
446. In conclusion, I am satisfied that Essendi has made out its case in relation to the legal obligations clause and the FSO additionally and separately to its claim under the good condition covenant.

K. Issue 3 – the claim for derogation from grant.

447. The pleaded case is that since Essendi has been required, acting reasonably and/or as a prudent hotelier in light of advice received from a well-respected and experienced fire engineering expert, to close the premises to its customers by reason of the presence of an unsafe external wall system such that the premises can no longer be used as a hotel, LPC has derogated from its grant of the lease.
448. It is not in doubt that there is an implied covenant on the part of LPC not to derogate from grant.
449. If, as I have found, Essendi succeeds on the breach of covenant claims identified above, then it is unnecessary to consider the claim for derogation from grant as a separate additional claim.
450. It is, however, necessary to address this claim briefly as a separate claim in case there is a successful appeal by LPC on the above findings.
451. In order to succeed on this claim as a separate and freestanding cause of action Essendi relies upon the following propositions.
452. First, by reference to the judgment of Neuberger J in Platt v. London Underground Ltd [2001] 2 EGLR 121 (where the claim was based on the defendant having not operated an exit at its tube station during most opening hours, resulting in there being no foot traffic past the kiosk which it had let to the claimant, thus rendering it unviable) that an omission to act may amount to a breach of the non-derogation obligation. It is submitted that the decision of HHJ Pelling QC (sitting as a Judge of the High Court) in William Old International v Arya [2009] 2 P&CR 20, at [34]-[35] is not, on proper analysis, authority to the contrary.
453. Second, by reference to the same judgment, that the task for the court is: (a) to identify what obligations, if any, on the part of the grantor can fairly be regarded as necessarily implicit, having regard to the particular purpose of the transaction when considered in the light of the circumstances subsisting at the time the transaction was entered into; and (b) to consider whether the act or omission has caused the demised premises to become unfit or substantially less fit than the purpose for which they were let.
454. Third, that insofar as it is necessary to show conduct which can be said to amount to an act as opposed to an omission, LPC's conduct in failing to remove the category 3 ACM cladding panels when it is now known that they were dangerous amounts to a legal nuisance and, thus, in legal terms, an "act" in the sense of a failure to act where there is a duty to do so. In support of this submission Essendi commends to me the analysis by Evans and Gardner in their recent article: 'Defective Buildings Are a Nuisance', Evans and Gardner, Oxford Journal of Legal Studies 2026, Vol. 00, No. 0 pp. 1–26.
455. Fourth, that insofar as LPC relies on clause 5.7 of the current lease which, as already noted, provides that "nothing in this lease contained shall imply or warrant that the premises may be used for the permitted use …", that is not a pleaded point and, in any event, does not detract from the non-derogation obligation.
456. In my judgment, however, there are a number of fundamental difficulties with this claim.
457. First, at the time when the lease was entered into the position was precisely the same as it was now, i.e. the external cladding comprised category 3 ACM cladding panels, albeit that this was not known to the parties at that time, and that, post Grenfell, this was known to be a significant fire safety risk which, if present, required remediation. Thus, there has been no change in the position since the date of entry into the lease, other than the true position having been revealed and Essendi having received the advice which it did from Mr Bullock.
458. Second, that – on the hypothesis that there is no valid claim under the repairing covenant or the legal obligations covenant – the parties had entered into the lease on the basis that Essendi would have no right to compel LPC to replace the external cladding on the basis that they transpired to be category 3 ACM cladding panels.
459. Third, that clause 5.7 - which I am satisfied it is just to allow LPC to rely upon, on the basis that it is a pure point of law so that there is no basis for saying that Essendi is prejudiced by any inability to adduce evidence in response – makes clear that no warranty was given as to the use of the demised premises as a hotel.
460. Fourth, that the rent payment provisions make clear that this is not a case where the consequences of the hotel being unable to be operated are felt only by Essendi. If there was a substantial rack rent payable, regardless of whether Essendi could use the Hotel, then there might be more scope for an argument that it was an essential part of the bargain that LPC was obliged to take reasonable steps to ensure that the Hotel could be used for that purpose.
461. Fifth, that the absence of any service charge provision militates against the conclusion that it would be just for Essendi to be able to compel LPC to replace the category 3 ACM cladding panels on the basis that this would be entirely at LPC's cost if – on the assumption applying here - that is not something which LPC is required to do under the good condition or legal obligations covenants.
462. In my judgment all of these arguments indicate that the parties could not have intended, objectively given the terms of the current lease and the relevant surrounding circumstances, that LPC would have been obliged to take, at its own expense, all reasonably necessary steps to ensure that the Hotel was able to remain open for the duration of that lease, even if LPC had entered into no contractual obligation to do so, and even if – in a case such as the present – that had not been required by the regulatory authorities under the FSO.
463. Finally, I have noted the arguments made in the article to which I have been referred. In short, whatever the strengths of that argument in the context of a flat owner with a long leasehold interest and no entitlement to insist on replacement of any dangerous cladding and/or an onerous service charge liability, in my judgment it would not be right for me as a judge at first instance to extend the law as suggested and hold that LPC is guilty of a nuisance which can only be remedied by its replacing the category 3 ACM cladding panels at its own expense. Further, if it could be said that this state of affairs amounted to a nuisance then, in my judgment, it ought only to be a measured duty of care, so that it should only be an obligation either to agree to do so but at Essendi's expense, or to allow Essendi to do so at its own expense.
464. I would not therefore have found for Essendi on this ground had it failed on its primary cases. For completeness, the strength of those arguments raised above which are unrelated to the presence or absence of any liability under the good condition or legal obligations covenants, also satisfies me that this claim would have failed in any event and regardless of the fact that I have already found LPC liable under the good condition and legal obligations covenants.

L. Issue 4 – the claim for specific performance.

465. The claim as pleaded sought two orders for specific performance.
466. The first, which Essendi no longer pursues, is: "An order that the Defendant do within 3 months from the date of the order cause to be carried out to the Building all proper and competent investigations and reports necessary in order to (i) properly fire risk assess the structure, façade, external building envelope and cladding of the Building and (ii) determine the full extent of the remedial work required in order to comply with the Defendant's obligations under the Regulatory Reform (Fire Safety) Order 2005 and with the provisions of the Lease as set out above".
467. The second, which Essendi pursues in modified form, is: "… an order that the Defendant do within 6 months from the date of the order commence all necessary remedial work to the structure, façade, external building envelope and cladding of the Building (including, without limitation, removal and replacement of all the ACM cladding present on it) and complete those works in accordance with the provisions of Part I of the Building Act 1984 and clauses 4.3 and 4.6 of the Lease within a further 12 months (with liberty to apply as to the deadline for completion of the work)".

Essendi's position.

468. Essendi's position in its closing submissions may be summarised as follows: (1) The history of this dispute and these proceedings (including LPC's lack of action in taking any steps to progress, at least, the preliminary steps necessary to undertake any such works) shows that LPC will not remediate the cladding panels at all or within any reasonable timescale unless ordered to do so; (2) The category 3 ACM cladding panels constitute a continuing fire safety risk which is minimised but not completely removed by the closure of the Hotel; (3) The longer the delay in removing the category 3 ACM cladding panels the greater the cost to Essendi of having to keep the Hotel closed; (4) The works which LPC will be required to undertake are not particularly complex or difficult to describe in an order in sufficiently clear terms, and there is no reason to think that enforcing compliance with such an order would involve excessive superintendence by the court to an unacceptable degree; (5) LPC's open offer to remediate at its cost subject to Essendi providing an unlimited indemnity if it lost at trial was made too late and without sufficient detail being provided (and of course has now been overtaken by this judgment); (6) The self-help remedy to Essendi under clause 4.3.4 of the current lease is not a sufficient remedy in circumstances where: (a) all the works would have to be done to that part of the Hotel building retained by LPC; (b) there would be endless scope for dispute as to what Essendi was entitled to do; (c) there would be endless scope for dispute as to the costs of that work to be deducted from the future rent payable.
469. In summary, Essendi seeks an order that provides for work to be done in two stages, with the first stage being sufficient to enable Essendi to re-open the Hotel: (1) within 2 months of the date of the order LPC should commence and within 6 months complete at its own cost the removal of the category 3 ACM cladding panels and provide temporary weather protection; (2) within 9 months of the date of the order LPC shall commence and within 18 months complete at its own cost the re-cladding of the Hotel building so as to achieve a materially identical external appearance, in accordance with the Building Regulations and any other necessary consents (including consulting with Essendi in accordance with the terms of the current lease).
470. Essendi refers to a quotation from a reputable contractor, obtained in September 2025, to support the 6-month timescale for removing the existing cladding, which is endorsed by Mr Gray. Essendi also refers to Mr Gray's evidence to support the 18-month timescale for completing the replacement works. Essendi acknowledges that the court is likely to grant LPC permission to apply if more time is required despite the exercise of best endeavours.
471. Essendi has produced a draft order giving effect to these submissions. In broad terms, it seems to me to be a suitable vehicle to give effect to what Essendi proposes in relation to specific performance, save that: (a) I am not convinced that the provisions in relation to a programme of works are necessary or appropriate and that a better solution would not simply be for LPC to be under an obligation in suitable terms along the lines of the draft par. 6, which should apply to the first cladding removal phase as well as to the second recladding phase.

LPC's position.

472. LPC's primary submission is that an order for specific performance is not appropriate unless and until the claimant has identified the works which are required so as to form the basis for the order, because otherwise: (a) it is not possible to say whether the works would be reasonable or oppressive to order; (b) LPC would not clearly know what it would have to do, with the risk of litigation over compliance and an unfair risk of exposure to committal proceedings.
473. Its position is that instead the proper course is for there to be a subsequent trial at which the details of the necessary remedial works are worked out.

The relevant legal principles.

474. In the context of a case of some essential similarity to the present case, where the tenant of commercial property was seeking an order for specific performance to undertake substantial remedial works to the external façade of a large tower block used as a hotel (Blue Manchester Ltd v North West Ground Rents Ltd [2019] EWHC 142 (TCC)), I summarised the relevant principles at pars. 52 - 61 in terms which have not, so far as I am or have been made aware, been doubted since, nor have they been disputed at trial.
475. In short: (1) Specific performance is a discretionary remedy which will only be granted where it appears to the court in all the circumstances to be just and equitable; (2) The court should exercise caution because failure to comply with an order for specific performance is a contempt of court; (3) In an appropriate case the remedy may be granted to enforce a landlord's repairing covenant rather than leave it to the tenant to undertake the works and recover damages; (4) An order for specific performance to achieve a given result may be made, so long as the terms of the order can be precisely drawn and the defendant knows what has to be done in law and in fact; (5) the degree of precision will vary from case to case; (6) A defence of hardship will not be available save in exceptional circumstances.
476. In that case, I was satisfied that an order for specific performance should properly be made which required the defendant to remove the existing temporary remedial solution from the external facades and to remove and reinstate or replace the existing façade units so that they were securely affixed to the structure of the building in such a way as provides substantially the same external appearance as was present as at the date of the lease. I gave the defendant a reasonable time to design and implement these works and permission to apply to undertake some different remedial scheme if the remedial works were revealed to be not reasonably practicable other than at disproportionate cost.

Discussion and conclusions.

477. LPC's position seems to me to confirm what I would already have found even without it, which is that LPC has, as Essendi submits, demonstrated a desire to delay taking any of the steps which it ought to have taken as a reputable owner of a building clad in category 3 ACM cladding panels for as long as it possibly can. Whilst I acknowledge that it has been fully entitled to contest these proceedings, its lack of willingness to take proactive steps either to undertake its own FRAT, to comply with the timetable set by the LFB, or to investigate with independent advice or adduce any such evidence as to the practicalities of any necessary works in terms of planning and procurement in case it lost the case are telling.
478. None of the experts have identified any real difficulty about knowing what has to be done, because it is – as Essendi submits – entirely straightforward, namely to remove the existing category 3 ACM cladding panels as soon as practicable and provide alternative temporary weather protection and then to provide an alternative replacement external façade which is similar in appearance to the existing but does not create a fire safety risk. As Essendi submits, within reasonable limits it is for LPC to decide precisely what works it is required to do to achieve compliance with this order, which is in the nature of an order to achieve a specified result, which the experts have identified no difficulty in understanding or in securing.
479. It would have been perfectly possible for LPC to instruct its experts, or otherwise secure evidence, to show either that identifying a suitable scope of works required is extremely difficult or that the nature and extent and cost of those works is too extensive and expensive such as to make such an order oppressive and impossible for it to comply with. It has chosen not to do either.
480. In the circumstances, I am satisfied that an order for specific performance should be made substantially in the terms sought, although I will of course hear representations as to the precise form of order when I come to make the order giving effect to this judgment.

The western elevation.

481. Essendi's draft order proposes that "insofar as it is not practicable to clad the part of the western elevation of the Building that directly faces the eastern elevation of the adjoining Williamson Heights, the Defendant shall use all reasonable endeavours to negotiate a licence (or other form of permission) with the registered proprietors of the freehold of that Building (currently Peabody Trust), so as to permit the sealing of the unclad section of the western elevation of the Building to Williamson Heights by way of flashings, so as to replicate so far as is practicable the arrangements in place prior to the demolition of Mahatma Gandhi House in or about 2018".
482. Save that the evidence shows that it would not be practicable to clad the affected part, I endorse this order. I reject LPC's submission that it cannot be ordered to install flashing other than in precisely the same position as it was when the previous office building was in place. Its obligation is to install flashing suitable to the new apartment block which has replaced it, and Peabody's solicitors have confirmed that in principle Peabody is willing to agree to such a solution. The permission to apply will apply to this part of the order as well.

Other matters.

483. For completeness, I conclude this final part of the judgment by recording that Essendi has not pursued various other minor allegations, specifically the absence of cavity barriers and closers, based on the agreement between the building surveyor experts. There was also an allegation that inspection holes had not been filled in, but Mr Gray accepted that the temporary repairs were acceptable and the need for any permanent repair had been overtaken by the need to remove and replace the existing cladding panels anyway. In reality, all of these matters will be resolved by the removal and, in due course, replacement of the cat. 3 ACM cladding panels from the Hotel building.

End.

Note 1    I also decided at the PTR that certain particular issues pleaded in paragraph 61A.3 of the Defendant’s RADCC would not be determined at the liability trial.    [Back]

Note 2    Meaning a plastic which can be softened by melting to allow it to be shaped into what then becomes a hard structure again on cooling, although if re-melted it will lose its shape again.     [Back]

Note 3    He made clear in a later section that he was referring here to the risk of prosecution for breach of the FSO and that if injuries were caused then he believed that “criminal charges would be a certainty”.    [Back]

Note 4    It was a little surprising that even going into trial this was not formally conceded by LPC, not least because the fire safety experts had agreed in the joint statement that “inspections at locations at various height on different facades of the building and tests to BSEN ISO 1716 by a UKAS accredited laboratory of samples of the cladding panels removed from these locations indicate that all rainscreen cladding panels installed on the building are Category 3 ACM (i.e. ACM with a 100% polyethylene core)”. Happily, by the end of the trial this was no longer in issue, and it was obviously the only conclusion based on the evidence, which was all one way, and the lack of any further investigation by LPC to seek to cast doubt on the matter.    [Back]

Note 5    See the Grenfell Phase 1 report chapter 26 part 1.    [Back]

Note 6    See the fire experts’ joint statement at par. 7b.    [Back]