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Legal Update

UK Court of Appeal overrules Goldacre and Luminar

25 February 2014
Mayer Brown Legal Update

The Court of Appeal has handed down judgment in the highly anticipated Game case and has overruled the controversial decisions of the High Court in Goldacre and Luminar.

The decision has confirmed that where an administrator makes use of leasehold property for the purposes of an administration, the reserved rent is payable as an administration expense for the period during which the property is used, and will be treated as accruing from day to day for that purpose. This is true whether the rent is payable in arrears or in advance and the date upon which the rent becomes due and payable is irrelevant.

The issue on the appeal was the treatment of rent payable under a lease held by a corporate tenant that has entered administration. The appeal court was asked to determine when such rent is no more than a provable debt; and when it ranks as an expense of the administration.


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