Maher & Anor v Investalet Ltd & Anor

Section 234 Insolvency Act 1986 provides:

“(2) 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.”

“Property” is defined in s 436 of the Act to include “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 question for the court in Maher & Anor v Investalet Ltd & Anor [2025] EWHC 3133 (Ch) was whether s 234 was the correct route for an office-holder to use to seek vacant possession of company property from a trespasser.

Before ICC Judge Greenwood was an application under s 234 Insolvency Act 1986 by the joint administrators of Pocket Renting Limited seeking an order for vacant possession of five properties owned by the company which had been let by the company to the first respondent, Investalet. The properties were apparently occupied by sub-tenants, but although Investalet appeared to oppose the application, none of the occupiers had responded to the proceedings or appeared to resist the order sought.

The main interest in ICC Judge Greenwood’s judgment arises from the central issue between the parties, namely the scope of s 234 and, in particular, whether it allowed the court to make an order for vacant possession against a mere trespasser. That involved consideration of a number of authorities, principally Carvill-Biggs v Reading [2025] EWCA Civ 619 in which Snowden LJ said:

“[Section 234] does not create new rights but is designed as a summary procedure to assist an insolvency office-holder to carry out his functions in the relevant insolvency process. The office-holder can obtain an order in his own name for transfer etc. of company property to himself, but the section does not give the office-holder any better rights to any property than the company had: see Leyland DAF Limited [1994] 2 BCLC 106, Smith v Bridgend CBC [2001] UKHL 58 at [28] and Ezair v Conn [2020] EWCA Civ 687 at [26].”

Carvill-Biggs was an application by administrators under s 234 for the delivery of possession of a residential property occupied, as a trespasser, by a director of the company. Prior to the administration the property had been charged by way of legal mortgage to a lender which had enforced its security by appointing receivers under the Law of Property Act 1925 and by starting possession proceedings in the County Court under CPR Pt 55. Allowing the respondent’s appeal, the Court of Appeal set aside the possession order made by the judge on two bases: first, that once a receiver has been appointed under a mortgage, a liquidator of the company subsequently appointed was not entitled to get in or realise the charged property, as it was no longer property “to which the company is or appears to be entitled” under s 144 Insolvency Act 1986, and was therefore not “property” for the purposes of s 234; and second, the mortgagor company’s right to recover possession of the property had come to an end, before the beginning of the administration, when the mortgagee had commenced County Court possession proceedings; the administrators were in no better position than the company; accordingly, they had no right to seek possession under s 234 (or, presumably, at all).

Apart from that, however, as ICC Judge Greenwood noted, Snowden LJ had also commented:

“42. I agree with the Judge that, in accordance with section 436 of the Insolvency Act, ‘property’ for the purposes of section 234 is wide enough to include land and any interest in land. However, it is apparent that the Judge’s decision was not based upon a suggestion that the Respondents had in their possession or control any legal or equitable interest in the Land that they were required to convey or transfer to the Administrators. This was not, for example, a case where a person held the registered legal title to land on trust for the company as beneficial owner, and the administrators sought to have that legal title transferred or conveyed to them. The Respondents had no legal or equitable interest in the Land to deliver up. They were only in possession of the Land in the sense that they were occupying it.

43. In this regard, I have very real doubt that section 234 is intended to apply where the only basis for saying that a person ‘has in his possession or control property to which the company is entitled’ is that he is occupying land as a trespasser. I find it difficult to see what property a trespasser could be ordered to ‘pay, deliver, convey, surrender or transfer’ to an office-holder. What a trespasser would in fact be required to do would be to cease to occupy the land. The point can be tested by contemplating what would happen if an order that a person ‘deliver possession’ of land was not complied with. In such a case the court would simply order that the person be physically removed (evicted) from the land in question.”

“The point,” Judge Greenwood said, “is this: even if the land in question, occupied by a trespasser, is itself relevant property for the purposes of section 234, and even if the company (and so the office-holder) has a right to seek vacant possession of that property, nonetheless, is the office-holder, in doing so, seeking to compel the trespasser to ‘… deliver, convey, surrender or transfer’ any such property ‘to the office-holder,’ rather than seeking simply to compel that person to leave – to vacate and cease to occupy?”

The judge went on to reject the applicants’ contention that they were entitled to relief: although a trespasser had an interest in land capable of being transferred and asserted against others with an inferior or no right at all, he could not assert it as against a person with a superior right, and therefore could not transfer (or deliver, convey or surrender) it to that person (who by virtue of his superior right, already had all that he needed as against the trespasser): “The person with the superior right vindicates it by compelling the trespasser to leave, terminating his interest; he does not acquire that interest – he brings it to an end.”

The decision was an unfortunate one for the administrators since, as the judge held,

“[N]either the alleged sub-tenancies nor the alleged work provided any grounds for resisting an order for possession. Had section 234 allowed for it, I would have made the order sought. Since the beginning of the administration, Investalet’s conduct in respect of the Properties has been discreditable: it has failed to produce information reasonably sought; it has failed to pay rent; and it has failed (despite having agreed to do so) to give possession or make any apparent effort to do so; its evidence in the proceedings was, as I have said, unsatisfactory; it appears, quite cynically, to continue to make profit from the Properties at the expense of the Company’s creditors.”

Nonetheless, given his conclusions on the scope of s 234, the judge had no alternative but to dismiss the application.

The judge distinguished the case before him from that decided by Deputy ICCJ Schaffer in Clive Everitt v Zeital [2018] EWHC 1316 (not cited to the Court of Appeal in Carvill-Briggs) in which the deputy judge expressed himself satisfied that s 234 was not limited to delivery up of documents, but, on its natural reading, included the delivery up of land:

“Whilst I acknowledge that the judge in that case (in which the respondents appeared in person) made an order for possession against the respondents (whom he found to have no rights of occupation or ownership, or any other relevant interest), the argument that he resolved at [66] was not the same as that raised by Snowden LJ in Carvill-Briggs. The decision does not compel or persuade me to accept the Applicants’ argument in the present case.”

ICC Judge Greenwood’s decision does not leave the office-holders without a remedy. They are still able to pursue relief through the company under CPR Part 55.

This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.

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