The recent High Court decision in Maher and another v Investalet Ltd [2025] EWHC 3133 (Ch) serves as a critical reminder for insolvency practitioners about the importance of choosing the correct procedural route when seeking possession of property. It is an important case for insolvency practitioners dealing with intermediate landlords and unauthorised occupiers.

In this case, the court held that section 234 of the Insolvency Act 1986 (“IA 1986”) cannot be used to force trespassers to give up possession of a property. This is because a trespasser’s possessory title is not the type of property that can be paid, delivered, conveyed, surrendered or transferred under section 234 IA 1986.

This case further develops the Court of Appeal’s decision in Carvill-Biggs v Reading, which you can read more about in our blog.

Background to the Case

Pocket Renting Limited, a company owning a portfolio of residential properties, entered administration (the “Company”). Prior to the administration, the Company let five residential properties it owned in London to Investalet Ltd (“Investalet”) under written tenancy agreements (the “Properties”). The Properties had been managed by a managing agent acting for the Company under a management agreement; however, the administrators terminated this agreement and entered into a new management agreement with a different agent.

The new agent requested information about the identity of the occupiers of the Properties, any relevant tenancy agreements, and the payment of rent. Despite repeated requests, Investalet refused to provide the information and declined to pay rent.

The administrators decided to terminate the tenancy agreements and served notices to quit on Investalet, requiring vacant possession of the Properties by 31 August 2024. When possession was not delivered, the administrators applied under section 234 IA 1986, seeking an order for vacant possession.

The Legal Issue

Section 234 IA 1986 applies where a company has entered administration and empowers the court:

“Where any person has in his possession or control any property, books, papers or records to which the company appears to be entitled, the court may require that person forthwith (or within such period as the court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the office-holder.” (emphasis added)

“Property” is defined at section 436 IA 1986 as: including “money, goods, things in action, land and every description of property wherever situated and also obligations and every description of interest, whether present or future or vested or contingent, arising out of, or incidental to, property.”

The pivotal question for the court was: Does section 234 IA 1986 allow the court to order vacant possession against mere trespassers? In short no, relying on the earlier decision in Carvill -Biggs where the Court of Appeal was asked (but refused) to make an order for possession under section 234 IA 1986 against the company’s former director who was in occupation of the company’s property.

Section 234 IA 1986 only gives insolvency practitioners the same rights as the company has to seek possession of company property.  Trespassers do not have company property, they are using it, but they do not possess it. Section 234 IA 1986 in that sense does extend to removing people from company property.

The court therefore dismissed the administrators’ application. However, the court reflected that the administrators had a strong case for pursuing possession proceedings under CPR Part 55, which is specifically designed for recovering possession of property from unlawful occupiers.

Key Takeaways

This case illustrates the importance of pursuing the correct procedural route for court orders from the outset, as failure to do so may result in dismissal and lead to wasted time and costs. It is a reminder for insolvency practitioners that section 234 IA 1986 is not a tool that can be used by practitioners to obtain vacant possession of a property.

Insolvency practitioners that are dealing with unauthorised occupiers should therefore quickly establish on what basis an occupier occupies a property. If they have the right to occupy a property under a lease or a licence, then their right to occupy will be determined on the terms of those. However, if the occupier is in occupation in breach of a lease or a licence so are trespassers, then a claim should be brought under CPR Part 55 for vacant possession.