Can section 234 of the Insolvency Act 1986 serve as a fast-track route for administrators to secure vacant possession of property from trespassers? That was the question before the High Court in the recent case of Maher v Investalet Ltd [2025] EWHC 3133 (Ch).

The facts

The administrators of Pocket Renting Limited made an application under section 234 of the Insolvency Act 1986 (IA86) for vacant possession of the five properties it owned, which were let to the tenant, Investalet Limited (Investalet), through tenancy agreements. Investalet sub-let the properties to a third party for use as short-term holiday lettings without the administrators' consent. Investalet also failed to pay its rent when due in breach of its tenancy agreements.

The administrators terminated the tenancy agreements by serving valid notices to quit and sought vacant possession, but the tenant failed to comply. The administrators subsequently applied for delivery up of possession of the properties under section 234 IA86.

The issues

Section 234 IA86 provides that “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 in this context includes interests in land, as confirmed in the recent Court of Appeal case of Carvill-Biggs v Reading [2025] EWCA Civ 619.

The primary issue for the court to determine was whether section 234 IA86 could be used as a mechanism for the court to make an order for vacant possession in favour of the administrators against trespassers. The administrators argued that the tenancies had been terminated, and any current occupiers were trespassers. The court therefore had to consider whether a trespasser's possessory interest in the land was capable of being transferred to the administrators under section 234.

The decision

The court drew heavily on the Court of Appeal judgment in Carvill-Biggs v Reading (above) where administrators sought (but were refused) possession of a property occupied by a director as trespasser under section 234 IA86. The judge quoted Snowden LJ in the Court of Appeal as follows:

“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 High Court judge agreed with this analysis and concluded that section 234 does not allow for an order for vacant possession against a trespasser. The judge found that while a trespasser has a possessory interest, this interest cannot be transferred to someone with a superior right. If the trespassers were to vacate the property, they would not transfer possession to the administrators; rather their possessory interest in the land would be terminated.

The obligation to give vacant possession by “returning the property” free of people, chattels and interest, did not mean that there was, or would be, a relevant transfer for the purposes of section 234. Consequently, the application for vacant possession under section 234 was dismissed. However, the Court held that possession proceedings can be (and ordinarily are) pursued under Part 55 of the Civil Procedure Rules (CPR), in the name of the company, and it would have granted the order for possession had that jurisdiction existed. 

Implications for insolvency practitioners

The judgment clarifies that section 234 IA86 does not extend to obtaining vacant possession of property from trespassers. Insolvency practitioners must instead pursue possession proceedings under Part 55 of the CPR in the name of the company. Section 234 cannot be used as a shortcut, even where the administrators are otherwise found to be entitled to possession (as the judge determined here).

Part 55 of the CPR should be used to obtain possession of both commercial and residential property from trespassers. Trespassers include squatters as well as those who have remained on land without consent of the person entitled to possession. Such claims are usually commenced in the County Court unless the claim is considered particularly complex in which case it may be commenced in the High Court. The CPR sets out what the claim needs to include and the relevant service requirements, all of which must be strictly adhered to. 

This decision highlights the limitations of section 234 and the necessity for insolvency practitioners to use appropriate legal channels to obtain an order for possession. The case underscores the importance of understanding the scope of section 234 and the procedural requirements for dealing with trespassers in insolvency situations.