In a recent case, the High Court dismissed an application by administrators for vacant possession against trespassers under 234 of the Insolvency Act 1986.
The case of Maher v Investalet [2025] concerned five residential properties, owned by Pocket Renting Ltd (who went into administration). Pocket Renting Ltd sub-let the properties to another company before the administration had commenced (the First Respondent). The First Respondent had sub-let the properties to another company after the administration commenced, without having received consent from the administrators. That company then let the properties to unknown occupiers under assured shorthold tenancies.
The administrators sought vacant possession of these five properties and wanted to sell them to realise their value. To do this, they served notices to quit on the First Respondent and all occupiers, but possession was not given. The administrators argued that no rent had been paid, the tenancy agreements with the First Respondent had been terminated and that sub-letting was not permitted.
The issue therefore was whether section 234 of the Insolvency Act 1986 allowed the Court to order vacant possession against a trespasser.
Decision and Legal Principles
Section 234 empowers the Court to order any person, who has in their possession or control any property to which a company (in administration or liquidation) is entitled, to deliver, convey, surrender or transfer the property (including land) to the insolvency office holder.
The application by the administrators was refused on the basis that section 234 of the Insolvency Act 1986 was a summary mechanism that allows recovery of property the company already has a right to control. The important point was that it doesn’t create new rights for administrators. The trespassers had a limited possessory interest, which was enforceable only against parties with inferior rights, instead of against someone with a stronger legal right. Because of this, the court ruled that there was nothing for the trespasser to ‘deliver up’ under section 234.
In essence, the court ruled that section 234 cannot be used as a shortcut to obtain vacant possession of a property by insolvency practitioners.
Correct Procedure
The correct procedure that should be used to obtain vacant possession would be an application under Part 55 of Civil Procedure Rules. In this case, because the notices to quit had already be validly served, and the tenancies had ended, the applicants would be entitled to possession of the properties.
This decision highlights the limits of section 234 when seeking possession of land occupied by trespassers and highlights the importance of considering the correct statutory bases when making an application for possession.
