Game Station: Court of Appeal rules on the treatment of rent as an administration expense

The Court of Appeal has handed down its judgment in Jervis v Pillar Denton; re Game Station on 24 February 2014.

In an important ruling for administrators and landlords alike, the Court of Appeal overruled the cases of Goldacre (Offices) Ltd v Nortel Networks UK Ltd [2011] Ch 455 and Leisure (Norwich) II Ltd v Luminar Lava Ignite Ltd [2013] 3 WLR 1132 and clarified the true scope of the “salvage” or “Lundy Granite” principle. The decision represents a welcome return to the “pay for what you use” principle and strikes a fairer balance between different creditor and expense groups.

UPDATE :  Game Station Limited applied to the Supreme Court for permission to appeal against the decision of the Court of Appeal but such permission was denied on 31 October 2014

For more information on this important ruling, please see our briefing note below: