Game On

The rule established in Goldacre v Nortel is concerned with the ability of landlords to recover rent from those tenants who are in administration. It initially caused great happiness for landlords, but then consternation as tenants and their administrators exploited it to their advantage.

As the law stands, once a tenant is in administration and is using the premises (even only part of them) for the benefit of the administration, rent becoming due is payable in full as an administration expense (i.e. in preference to other categories of the tenant's debts and therefore likely to be actually recovered by the landlord). Landlords' initial excitement at the decision was quickly scotched, when administrators began routinely placing tenants into administration immediately after a quarter day with that quarter's rent already in arrears. This (perhaps unforeseen) corollary of the Goldacre decision - which was confirmed by the decision in Luminar Leisure - is that rent