Jervis v Pillar Denton Ltd (Game Station) & Ors [2013] EWHC 2171 (Ch) (01 July 2013)

Jervis v Pillar Denton Ltd (Game Station) & Ors [2013] EWHC 2171 (Ch) (01 July 2013)

The court followed Goldacre and Luminar, holding that rent, service charge, and insurance payments falling due in advance before the administrators' appointment are not payable as administration expenses, but those falling due in advance during administration are payable in full as expenses, regardless of subsequent vacation of the premises.

Citation
[2013] EWHC 2171 (Ch)
Parties
Applicant: Michael John Andrew Jervis; Respondents: Pillar Denton Limited (Game Station) and others; Seventh Respondent: Game Retail Limited
Jurisdiction
England and Wales
Judgment Date
01 July 2013
Procedural Posture
Application for Directions Under Paragraph 63 of Schedule B1 to the Insolvency Act 1986 / First Instance Judgment in the High Court, Chancery Division
Outcome
Order made in terms agreed by the parties, following Goldacre and Luminar; permission to appeal granted to the landlords and permission to cross-appeal granted to Game Retail Limited.
Legal Topics
Administration Expenses, Priority of Rent and Service Charges, Treatment of Advance Rent in Administration, Landlord and Tenant Law
Insolvency Property Law Administration Expenses Priority of Rent and Service Charges Treatment of Advance Rent in Administration Landlord and Tenant Law

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Parties

Michael John Andrew Jervis

Applicant

Pillar Denton Limited (Game Station) and others

Respondents

Game Retail Limited

Seventh Respondent

Procedural Posture

Application for Directions Under Paragraph 63 of Schedule B1 to the Insolvency Act 1986 / First Instance Judgment in the High Court, Chancery Division

Legal Issues

  1. 1 Whether rent, service charge, and insurance payments due in advance under leases should be treated as expenses of the administration or as provable debts
  2. 2 Whether the timing of the administrators' appointment relative to the rent due date affects the classification of such payments

Ratio Decidendi

The court followed Goldacre and Luminar, holding that rent, service charge, and insurance payments falling due in advance before the administrators' appointment are not payable as administration expenses, but those falling due in advance during administration are payable in full as expenses, regardless of subsequent vacation of the premises.

Court Disposition

Order made in terms agreed by the parties, following Goldacre and Luminar; permission to appeal granted to the landlords and permission to cross-appeal granted to Game Retail Limited.

Orders

  • Neither the quarterly rent nor service charge due in advance on 25 March 2012 is payable as an administration expense for the relevant leases.
  • No sums in respect of service charge due in advance before 26 March 2012 are payable as administration expenses for the relevant leases.