The High Court has ruled in the case of Goldacre (Offices) Limited v Nortel Networks UK Limited (in administration) [2009] that rent for premises that continue to be used for the beneficial outcome of an administration must be paid as an expense of the administration. This decision confirms that the court has no discretion in these circumstances and that it does not matter if only part of the premises are being used. This contrasts with the position where a landlord wishes to take action against a tenant in administration such as bringing forfeiture or injunction proceedings. In those circumstances, the court must follow the approach taken by the Court of Appeal in Sunberry Properties Ltd v Innovate Logistics Ltd [2009] and balance the interests of the landlord and the creditors of the company in administration.

This High Court decision provides helpful clarity to landlords and confirms that rent for premises that continue to be used during an administration will rank ahead of sums due to preferential and other unsecured creditors.