Last week the Court of Appeal finished hearing the long awaited and much anticipated appeal in Jervis and another v Pillar Denton Limited (Game Station) on the hotly contested issue of whether rent is payable as an administration expense. Depending on the decision of the appeal judges this case may trigger a dramatic shift in the way that rent arising during administration is currently treated.

Background 

In this recession like no other, enforcement over complete and incomplete residential and other property developments is a common scenario faced by both bank and Insolvency Practitioner alike. The dilemma initially appears quite stark; Should the bank advance further monies to complete out developments in order to maximise realisations or sell the site "as is" to another developer but at a significantly discounted price? The purpose of this article is to consider the issues which warrant consideration before devising an enforcement strategy in relation to incomplete developments.

The Court of Appeal delivered judgment on Monday morning in the much anticipated appeal in Jervis & Others v Pillar Denton & Others on the treatment of rent payable under a lease held by a corporate tenant that enters administration. The case involved the Game Administration.