Leisure (Norwich) II Ltd & Ors v Luminar Lava Ignite Ltd

Leisure (Norwich) II Ltd & Ors v Luminar Lava Ignite Ltd

Rent payable in advance and accrued before the commencement of administration is not recoverable as an administration expense, even if the administrator retains the property for the purposes of the administration; only rent falling due after commencement and during retention is payable as an expense.

Parties
Applicant/claimant: Leisure (Norwich) II Ltd & Ors; Respondent/defendant: Luminar Lava Ignite Ltd (in administration) & Ors
Jurisdiction
England and Wales
Judgment Date
28 March 2012
Procedural Posture
Application / Judgment
Outcome
Application for payment of rent accrued before administration as an expense dismissed; landlords awarded costs for application to forfeit; permission to appeal refused.
Legal Topics
Administration Expenses, Forfeiture of Lease, Rent Payable in Advance, Assignment of Lease, Costs in Settled Litigation
Insolvency Property Landlord and Tenant Administration Expenses Forfeiture of Lease Rent Payable in Advance Assignment of Lease Costs in Settled Litigation

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Parties

Leisure (Norwich) II Ltd & Ors

Applicant/claimant

Luminar Lava Ignite Ltd (in administration) & Ors

Respondent/defendant

Procedural Posture

Application / Judgment

Legal Issues

  1. 1 Whether rent payable in advance and accrued before administration is recoverable as an administration expense
  2. 2 Whether landlords are entitled to costs for application to forfeit leases after administrators consented
  3. 3 Applicability of the Lundy Granite principle to rent accrued before administration

Ratio Decidendi

Rent payable in advance and accrued before the commencement of administration is not recoverable as an administration expense, even if the administrator retains the property for the purposes of the administration; only rent falling due after commencement and during retention is payable as an expense.

Court Disposition

Application for payment of rent accrued before administration as an expense dismissed; landlords awarded costs for application to forfeit; permission to appeal refused.

Orders

  • Administrators not liable to pay rent accrued before administration as an expense.
  • Administrators to pay landlords' costs of the application for permission to forfeit.