One suspects that tales of default and insolvency will come to dominate these pages over the next few months. This week’s case in the Court of Appeal – Innovate Logistics Limited (in Administration) v Sunberry Properties Limited [2008] EWCA Civ 1261 – shows how the process of administration can remove from the landlord the carefully negotiated controls imposed in the lease on use, occupation and disposal of the property. Once a tenant is in administration, a general stay on proceedings arises. Landlords will not be able to bring proceedings to enforce lease provisions without leave of the court, or the consent of the administrator. Where consent is sought, the court will weigh up the interests of the landlord against the interests of the other creditors of the tenant-company, and will take into account the overall purpose of the administration. In this case (which is to be considered in depth in this month’s CPI Update) the landlord was refused leave to bring proceedings to restrain an unlawful parting with possession. Control well and truly lost.
Property PSL