Jervis v Pillar Denton Ltd (Game Station) & Ors

Jervis v Pillar Denton Ltd (Game Station) & Ors

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

Source-derived case information.

Parties
Applicant: Michael John Andrew Jervis; Respondents: Pillar Denton Limited (Game Station) and Others; 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 / Judgment at First Instance, Permission to Appeal Granted
Outcome
Order made in terms agreed by parties; permission to appeal granted to landlords and cross-appeal to Game Retail Limited.
Legal Topics
Administration Expenses, Priority of Rent Payments, Leasehold Liabilities, Apportionment of Rent, Permission to Appeal
Insolvency Landlord and Tenant Administration Expenses Priority of Rent Payments Leasehold Liabilities Apportionment of Rent Permission to Appeal

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Summary, issues, holding and outcome

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Parties

Michael John Andrew Jervis

Applicant

Pillar Denton Limited (Game Station) and Others

Respondents

Game Retail Limited

Respondent

Procedural Posture

Application for Directions Under Paragraph 63 of Schedule B1 to the Insolvency Act 1986 / Judgment at First Instance, Permission to Appeal Granted

Legal Issues

  1. 1 Whether rent, service charge, and insurance payments due under leases should be treated as expenses of the administration and accorded priority
  2. 2 Effect of recent authorities on rent payable in advance when administrators appointed after rent falls due
  3. 3 Whether the Lundy Granite principle requires apportionment of rent for periods of beneficial use

Ratio Decidendi

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

Court Disposition

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

Orders

  • Neither the quarterly rent which fell due in advance on 25th March 2012 nor any part thereof is payable as an expense of the administration in respect of the Four Leases or the Eldon Square Lease.
  • No sums in respect of service charge that fell due for payment in advance prior to the Administrators' appointment on 26th March 2012 and remain unpaid are payable as an expense of the administration in respect of the Four Leases or the Eldon Square Lease.