CREST V ARDMORE: BLO APPEAL IN THE ENGLISH COURTS DERAILED BY INSOLVENCY?

What you need to know

• The case of Crest Nicholson Regeneration Ltd v Ardmore Construction Ltd^[1] (Technology and Construction Court) has attracted significant commentary as essential reading for those looking to understand the reach of a Building Liability Order under the Building Safety Act 2022.
• Ardmore was granted permission to appeal by the English Court of Appeal, with an appeal date set for December 2026.
• Unfortunately, it is uncertain as to whether we will have the benefit of the Court of Appeal's judgment on this case as a number of companies within the Ardmore group have recently entered into Company Voluntary Arrangements.

What you need to do

This is an important decision and those interested in this area of the law should keep track of the outcome of the CVA arrangements and whether the Court of Appeal gets to consider the case.

CREST V ARDMORE: BLO APPEAL IN THE ENGLISH COURTS DERAILED BY INSOLVENCY?

The case of Crest Nicholson Regeneration Ltd v Ardmore Construction Ltd^[1] has attracted significant commentary as essential reading for those looking to understand the reach of a 'Building Liability Order' (BLO) under the Building Safety Act 2022 (BSA). The interest was set to continue as Ardmore was granted permission to appeal by the Court of Appeal, with a date set for the hearing in December 2026.

Unfortunately, those of us who were eagerly anticipating the judgment could be disappointed as the prospect of the appeal has been thrown into doubt due to several companies in the Ardmore group entering into Company Voluntary Arrangements (CVAs).

The First Instance Decision: A Brief Recap

Ardmore Construction Ltd (ACL) was engaged by Crest Nicholson (Crest) to design and construct 19 residential buildings at Admiralty Quarter in Portsmouth. Post-Grenfell investigations revealed extensive fire safety defects. Crest obtained an adjudication award of approximately £14.9 million, but ACL entered administration the day before the decision was issued.

Crest sought two BLOs against associates in ACL’s group: an “anticipatory BLO” (extending any relevant liability ultimately established against ACL to certain associated companies) and an “adjudication BLO” (making the associates jointly and severally liable for the £14.9 million award). On 1 April 2026, Mr Justice Constable granted both. The Court held that:

• anticipatory BLOs are available, i.e., the Court can grant a BLO in advance of a relevant liability being finally determined;
• an adjudicator’s decision, being binding unless and until overturned, is capable of amounting to a “relevant liability” for the purposes of section 130 of the BSA;
• the "just and equitable" test is deliberately broad and fact-sensitive, not confined to SPV structures; and
• partial BLOs are available – section 130(2) permits the Court to impose a BLO for part of the liability where that is just and equitable.

High Court Refuses Permission to Appeal

In a subsequent hearing on 8 May 2026 the BLO Defendants sought permission to appeal on five grounds. Mr Justice Constable refused permission on all of them and also refused a stay of execution and declined to certify the case for a leapfrog appeal to the Supreme Court, considering it a matter for the Court of Appeal.

The five grounds of appeal challenged:

• the Court’s discretionary finding that it was just and equitable to grant both BLOs;
• the availability of a two-stage anticipatory BLO;
• whether an adjudicator’s decision (because of its interim and provisional nature) can give rise to a relevant liability;
• the adjudicator’s jurisdiction over Defective Premises Act 1972 claims; and
• whether it was just and equitable to grant the adjudication BLO specifically.

On the discretion point, Mr Justice Constable held that the threshold for appellate intervention is that the decision was “plainly wrong” (a very high hurdle) and the defendants had not cleared it. On the anticipatory BLO jurisdiction, the Court noted that accepting the argument would mean there could in practice never be such a thing as an anticipatory BLO. On the remaining grounds, the appellants had largely failed to engage with the reasoning of the original decision and had instead attempted to re-run arguments already advanced at first instance.

The stay of execution also failed. The Court criticised the defendants’ financial evidence as inconsistent and incomplete, noting that the group chairman’s “reported (and not refuted)” personal fortune was more than sufficient to enable the group to continue trading.

The Court of Appeal Grants Permission

The Court of Appeal commended Mr Justice Constable's "comprehensive and closely reasoned judgment". They also observed that the applicants, Ardmore, "face a formidable challenge in seeking to appeal the Judge's conclusions on a decision which is rightly characterised as, in many respects, a form of statutory discretion".

However, permission to appeal was granted on 9 June 2026, with expedition given the importance of the issues. A hearing is currently set for 15 December 2026.

Ardmore argued that the appeal raises “issues of wider public importance for the construction industry, including the circumstances in which a Building Liability Order may be made and the extent to which liabilities may be imposed on group companies in respect of historic projects.” In line with this interpretation, the Court of Appeal noted that the issues raised by the appeal are "issues on which guidance from the Court of Appeal would be of real value".

Two days after leave to appeal was granted, the wider Ardmore construction group entered administration, with the property arm applying for a Part A1 moratorium under the Insolvency Act 1986 to ensure protection from creditors and continue pursuing the appeal. The group has stated that the judgment affected client confidence and payment terms across live projects, materially impairing its ability to trade. This is now reflected by the entry into CVAs of members of the Ardmore group.

Comment

In principle, a defendant may continue to pursue an appeal despite entering into a CVA. In practice, however, context is everything. This is not a case involving a single defendant. Five of the seven Ardmore group companies against whom BLOs are sought have entered into a CVA. Crest, as an unsecured judgment creditor, is bound by the full and final and binding terms of a CVA. The remaining two BLO Defendants are in administration.

The insolvency proceedings raise questions about whether this appeal will be heard. That would be a significant loss for the construction industry. Crest v Ardmore was poised to provide greater certainty on the reach of BLOs, the availability of anticipatory orders, and the circumstances in which group companies can be held liable for the defaults of insolvent affiliates. While the BLO Defendants would have faced an uphill struggle, the Court of Appeal’s willingness to grant permission to appeal reflects the significant policy questions under scrutiny - questions that may now remain unanswered for the time being at appellate level.