What happens if L is in administration, and T has a business tenancy that is nearing its end. Will T still have a right to renew under LTA 1954?

The answer is that L’s administration will not affect the right to seek a new tenancy, but the problem is that T cannot commence a claim for a new tenancy against L in administration without the permission of either the court or the administrator. So, there is a danger that permission will not be granted. However, in deciding whether to give permission, the court will balance T’s interests against those of L’s creditors in order to achieve the fairest result. That will then turn on the administrator’s aims and whether they have grounds for opposing T’s claim. In general terms, however, the court will recognise that T’s claims should be resolved without delay.

Whilst each case will depend on its own facts, the court will not refuse permission to T without good reason. This is well illustrated by Summerfield [2009], where T requested permission to continue with a claim for a new tenancy against an L in administration. The administrators opposed the application because of the possibility of redevelopment (which would then give more funds for the creditors). They argued that if they had more time, they might be able to successfully oppose T’s claim. However, the court allowed T to continue on the basis that T’s rights were quasi-proprietary, and thus should not be interfered with lightly (in particular, an unformed intention by L to redevelop would not be a sufficient reason for refusing permission). See commentary by Charles Russell in [2010] EG 20 March 115.