The Court of Appeal has revisited the question of whether rent, which falls due for payment before an insolvent company went into administration, could rank as an expense of the administration in Pillar Denton Ltd and others v Jervis and others [2014] EWCA Civ 180 (24 February 2014).

The case was concerned with the administration of the Game group of companies (commonly known as Game Station), and held that an administrator or liquidator of the insolvent tenant must pay the rent arising in respect of the property for any period during which the administrator or liquidator retains possession for the benefit of the administration or the liquidation. The Court of Appeal held that the relevant period is to be determined as a question of fact, and the rents due within that period should be treated as accruing from day to day.

Although the case concerned an administration, the Court of Appeal was clear that the same principles would apply to a company in liquidation.

The Court of Appeal has therefore overruled Goldacre (Offices) Ltd v Nortel Networks UK Ltd [2009] EWHC 3389 (Ch) and Leisure (Norwich (II) Ltd v Luminar Lava Ignite Ltd [2012] EWHC 951.

For further information please see the article Rent in Administration proceedings: the Court of Appeal decision in Re Game Station by  Richard Baines, Partner and Head of Corporate Restructuring which appeared in the June issue of The In House Lawyer.