The Court of Appeal has this morning found in favour of the landlords in the case of Jervis & Others v Pillar Denton and Others.
International law firm BLP, acted for the landlords and BLP Real Estates Disputes Partner, Michael Metliss, said: “This decision is a landmark one and should bring welcome clarity to what has become a contentious area of law in recent years. The landlord community will welcome the decision, knowing that they will receive payment for the use of their property by companies in administration.”
The decision will mean rents and service charges will now be payable as administration expenses whilst a lease is used for the benefit of an administration, even when they became due pre-administration. Much like utilities, they will be paid for each day that properties are occupied.
Administrators will also now have certainty of the rental liabilities that they will be required to pay, if they make use of leased properties.
On 26 March 2013, a number of companies within the Game Group of companies entered into administration. On the previous day, the March quarter day, rent and service charges became payable under the Group’s occupational leases. The administrators did not pay those sums as administration expenses, even though the companies continued to trade from many of the retail stores throughout the remainder of the quarter. In doing so, they relied on a High court decision in an earlier administration case, that companies in administration were not liable to pay as administration expenses sums that became payable before an administration starts. The affected landlords would be denied priority, and have to claim those sums as unsecured creditors.
Notes to Editors:
• For more information please contact BLP on 0203 400 4723 or 07552 799979, email firstname.lastname@example.org.
• Berwin Leighton Paisner is an award-winning, international law firm. It is ranked no 1 in all real estate disciplines by directories including Chambers. Clients include over 50 Global Fortune 500 or FTSE 100 companies and we have an established global footprint of eleven offices who have delivered more than 650 cross-border projects involving up to 48 separate jurisdictions in a single case.