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Frustration and Fire Safety – Into Nominee v Study Group 23 June 2026

In the Into Nominee One Ltd v Study Group UK Ltd [2026] EWHC 1201 (TCC) judgment, handed down on 21 May 2026, the Technology and Construction Court (“TCC”) (Roger ter Haar KC sitting as a Deputy High Court Judge) granted summary judgment for the landlord in a substantial rent claim arising from a long lease of a purpose-built student facility plagued by serious fire safety defects. The tenant contended that the lease had been frustrated by the discovery of life-critical cladding and internal fire safety defects uncovered in the post-Grenfell regulatory landscape, or alternatively by the effect of subsequent building safety legislation.

The court rejected both arguments. It held that the defects, although extensive and rendering the premises ‘not safe to occupy currently’, did not frustrate the lease. Central to that conclusion was the allocation of risk within the contractual framework. The Agreement for Lease, paired with a full repairing and insuring lease, contemplated both patent and latent defects and placed responsibility for remediation squarely on the tenant during the term. The important part was the tenant’s repairing covenant extending even to rebuilding the whole premises and the express exclusion of any warranty as to fitness for purpose.

"The decision confirms that the discovery of systemic fire safety defects, even those making occupation impossible for many years, will rarely satisfy the high threshold for frustration, particularly where the contractual matrix allocates risk of defects and remediation."

The decision confirms that the discovery of systemic fire safety defects, even those making occupation impossible for many years, will rarely satisfy the high threshold for frustration, particularly where the contractual matrix allocates risk of defects and remediation. The court once again reinforced a strict contractual approach to building safety liabilities.

Factual background

The dispute concerned Voyager House in Brighton, a purpose-built residential training facility comprising an academic block and a residential block, completed in around 2007 under a design-and-build contract. The premises were let to Study Group UK Ltd (“SGUK”) under a 25-year lease expiring in September 2032.

The building incorporated a range of cladding systems, including expanded polystyrene (“EPS”) insulation, aluminium panels and terracotta rainscreen cladding. Following post-Grenfell investigations undertaken in 2021–2022, intrusive surveys revealed extensive fire safety defects, including the absence of cavity barriers, widespread combustible insulation, defective fire stopping and failures in compartmentation.

Expert evidence established that these defects were serious, extensive and largely original to the construction. The fire engineering evidence concluded that the buildings were unsafe and the expert’s independent opinion was that “this building is not safe to occupy currently” and that safe occupation could not be achieved “without remedial works being carried out in advance”.

Remedial works were expected to take between 120 and 132 working weeks, with completion potentially stretching into early 2029. Critically, the court accepted for present purposes that the premises were unlikely to be usable for academic purposes before the lease expiry in 2032.

Against this factual backdrop, SGUK ceased operations and resisted the landlord’s claim for rent, contending that the lease had been frustrated by the discovery of fundamental safety defects.

Legal points

The claimant landlord sought summary judgment for unpaid rent exceeding £9m. Its case was straightforward; the lease imposed unconditional obligations to pay rent and to repair, and the tenant remained bound notwithstanding the discovery of defects.

The tenant advanced two-core defences based on frustration.

First, it argued that the lease was frustrated by the discovery of inherent, life-threatening defects. It pleaded that the “common purpose of the Lease was for user of the building…as a residential school or college”, and that the presence of such defects rendered the premises fundamentally different from what had been bargained for. The defects were said to be so severe that remediation, not mere repair, was always required, and that the building would be unusable for a substantial portion of the lease term.

Secondly, the tenant contended that frustration arose from post-Grenfell legislative changes, including the Fire Safety Act 2021 and the Building Safety Act 2022. These measures, it was argued, imposed new obligations and highlighted defects that rendered the premises non-compliant, requiring extensive remediation before lawful occupation could resume.

The landlord, in response, maintained that:

  • the contractual regime expressly contemplated defects through the defects liability period and collateral warranties;
  • the lease imposed a full repairing obligation, including rebuilding;
  • risk allocation provisions meant that defects, latent or otherwise, fell to the tenant; and
  • the doctrine of frustration could not be invoked to relieve a party of a bad bargain where risks had been contractually assumed.

Court’s decision

The court’s reasoning is a careful application of established frustration principles to a modern building safety context.

At the outset, it reaffirmed the orthodox test. Frustration arises only where a supervening event renders performance ‘radically different’ from that undertaken. Importantly, the doctrine is narrow and ‘not to be lightly invoked’.

Building safety defects and ‘common purpose’

The tenant’s principal argument, that the common purpose of safe educational use had been defeated, was rejected. The court emphasised that the contractual arrangements did not assume defect-free construction. Rather, the Agreement for Lease expressly contemplated defects through:

  • a defects liability period;
  • provisions for making good defects; and
  • collateral warranties for latent defects.

The court stated unequivocally that “it is quite clear that the Parties did not assume that the Premises would be defect-free”.

This point is critical for construction professionals. The judgment recognises that modern procurement structures assume the possibility of latent defects and provide mechanisms for recourse, rather than guaranteeing performance quality in absolute terms.

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"In combination, these provisions demonstrated that the parties had squarely allocated the risk of defects, including serious fire safety defects, to the tenant."

Risk allocation and the repairing covenant

The heart of the decision lies in the allocation of risk within the lease. The tenant’s repairing covenant was exceptionally wide, extending to an obligation “whenever necessary to rebuild reconstruct renew or replace the whole of the Demised Premises”.

The court described this as “an unlimited obligation except for a carve-out in respect of damage by Insured Risks”. This meant that even catastrophic defects requiring wholesale rebuilding fell within the tenant’s contractual responsibility.

The lease also excluded any warranty that the premises were suitable for the tenant’s intended use. In combination, these provisions demonstrated that the parties had squarely allocated the risk of defects, including serious fire safety defects, to the tenant.

The court concluded that the parties “took into account or should have taken into account that there could be fire safety defects…of sufficient seriousness that the Premises might need to be rebuilt or remedied”.

This finding reflects a strict contractual approach that will resonate across the construction sector.

The Nature of the Defects and Remediation

Whilst acknowledging the gravity of the defects, the court resisted elevating them into a frustrating event. The buildings were unsafe and remediation would take years, but this was insufficient. The fact that the premises might be unusable for most of the remaining lease term did not automatically render the contract ‘radically different’.

The court implicitly distinguished between physical condition and contractual allocation. Even extensive remediation, spanning multiple years and involving façade replacement, fire stopping and internal works, remained within the scope of the tenant’s obligations.

"Liability for defective cladding and fire safety systems may trigger significant remedial programmes, but those consequences will not readily unravel downstream contractual arrangements."

This has clear implications for contractors and developers. Liability for defective cladding and fire safety systems may trigger significant remedial programmes, but those consequences will not readily unravel downstream contractual arrangements.

Legislative change

The alternative argument based on post-Grenfell legislation was also rejected. The court held that the legislative changes did not materially alter the position of the parties. The building was unsafe before the legislation and remediation would have been required in any event. This is potentially significant.

The court observed that the legislation merely “focused people’s attention on these issues” rather than creating new substantive obligations that fundamentally changed the contractual landscape.

This is an important clarification. Whilst the Building Safety Act 2022 has transformed enforcement mechanisms and liabilities, it does not, create frustrating events for existing contractual arrangements.

The court concluded that the tenant had “no real prospect” of establishing frustration. Summary judgment was therefore granted in favour of the landlord.

Further implications

This decision confirms that post-Grenfell building safety defects, however serious, will rarely meet the high legal threshold for frustration. Contractors, developers and asset owners should note several key implications.

First, contractual risk allocation remains paramount. Where building contracts, agreements for lease, or occupational leases allocate responsibility for defects, the courts will enforce that allocation strictly. Attempts to rewrite the contracts to plead frustration will remain unlikely to succeed.

Secondly, remediation obligations will continue to cascade through the contractual chain. Tenants facing substantial remedial liabilities are likely to pursue contractors, consultants and insurers via collateral warranties and third-party rights. The case underscores the continuing importance of robust warranty regimes and professional indemnity cover.

Thirdly, the decision highlights the enduring significance of fire safety compliance at the design and construction stage. The defects identified in this case – combustible cladding, absent cavity barriers, defective compartmentation – are echoes of systemic failures in pre-Grenfell construction practices.

Finally, for future projects, the judgment reinforces a shift towards explicit risk management. Parties are likely to draft more detailed provisions addressing building safety compliance, remediation responsibilities, and the allocation of risk arising from evolving regulatory regimes.

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