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Property Update — February 2014: Re Game Station — the Court of Appeal has overturned the law on administrators paying rent

By Martin Thomas

On 24 February 2014, the Court of Appeal issued its judgment in the Game case: Jervis & Anr v Pillar Denton Ltd & Ors. The court overturned the law relating to an administrator’s liability to pay rent on leasehold premises, as set out in the 2009 case of Goldacre (Offices) Ltd v Nortel Networks UK Ltd and the 2012 case of Leisure Norwich (II) Ltd and others v Luminar Lava Ignite Ltd (in administration) and others.

The Game case was brought by a consortium of landlords against the administrators of the Game companies, and also against the successor company, Game Retail Ltd, which had indemnified the administrators against these claims.

The administrators were appointed the day after the March quarter day in 2012, and claims brought by the landlords for unpaid rent (said, in submissions, to be around £3m) were treated by the administrators as ‘normal’ debts in the administration. This meant that the landlords were unlikely to be paid in any substantial amount…

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