Administrators sought possession of land through section 234 of the Insolvency Act, but whilst the Court agreed that the administrators would be entitled to possession under CPR Part 55, they disagreed that possession could be granted under section 234.
Administrators were appointed over a company and sought vacant possession of five properties, owned by the company, that had been let and sub-let to various different parties.
In January 2025, the administrators applied for an order under section 234 of the Insolvency Act 1986, which provides that, where a third party has assets or property of a company in administration in its possession or control, the court can order delivery up of those assets.
It is not said in the judgment, but it appears that the administrators issued the application following the first instance decision of Carvill-Biggs v Reading, which granted possession of a residential property to administrators under section 234.
However, the Court of Appeal subsequently overturned that order, albeit on different grounds. The issue was obiter comments made by Lord Justice Snowden in that case that he had a “a very real doubt” that section 234 could be used to obtain possession of land, on the basis that a trespasser has nothing to deliver to the company, which owns the land. The Court should simply order the trespasser to vacate.
Neither party had referred to these comments in their skeleton arguments, but the ICCJ picked them up and invited submissions from the administrators on them.
Despite the administrators’ best efforts, the ICCJ was not persuaded to deviate from the Lord Justice’s comments and refused to make the order sought.
Expressing sympathy for the administrators, in light of the tenants’ and sub-tenants’ conduct, the ICCJ commented that the administrators would be entitled to possession of the properties pursuant to part 55 of the CPR. However, the administrators had not sought possession on those grounds, so the application under section 234 was dismissed.
In the matter of Pocket Renting Limited [2025] EWHC 3133 (Ch)
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