A heavyweight Chancery tribunal of the Court of Appeal (the Master of the Rolls, David Richards LJ and Newey LJ) today handed down judgment in the case of Thirunavukkrasu v Brar  EWCA Civ 2032.
The case considered the important question of whether or not a commercial landlord exercising CRAR pursuant to the Tribunals, Courts and Enforcements Act 2007, waives the right to forfeit for the arrears that the CRAR is based upon. The Court unanimously agreed with Aaron Walder, counsel for the Respondent, that the exercise of CRAR does amount to a waiver of the right to forfeit.
In a unanimous judgment, the Court held that simply because in certain circumstances CRAR can be exercised after the end of the lease, that does not mean that the exercise of CRAR is not an unequivocal act manifesting a concluded decision to affirm the existence of the lease. Indeed, the Court of Appeal went somewhat further than Marcus Smith J did at first instance, because the judge was willing to entertain the possibility that there could be circumstances where CRAR could be exercised but waiver avoided. In the Court of Appeal’s view, where forfeiture was the only way the lease (which had many years to run and was not excluded from the protection of the Landlord and Tenant Act 1954) could be brought to an end, CRAR must amount to a waiver.
The Court also held that because the Landlord had failed to properly exercise CRAR, by failing to give the requisite notice, that did not affect the waiver. Simply because the CRAR was not lawful was no less an indication of the Landlord’s state of mind.
Finally, the Court gave some consideration to section 210 of the Common Law Procedure Act 1852, and the interaction between that Act and CRAR. The Court of Appeal recognised that a right exists after CRAR is exercised to utilise that Act to apply for possession under a new, original and independent right. However, given that is a fundamentally different right, it does not assist with the question of waiving the right to forfeit under the re-entry provisions of lease. In effect, s.210 provides the landlord with a statutory defence to a claim of waiver, in circumstances when a landlord proceeds using that Act, but has no application when they seek to re-enter under the terms of the Lease.
In a detailed judgment, the Court of Appeal considered the law of waiver of the right to forfeit from as far back as the Landlord and Tenant Act 1709, and the authorities over the centuries, to arrive at a decision that definitively clarifies the exercise of CRAR as waiving the right to forfeit the lease.
The judgment is available here.
Aaron Walder acted throughout for the Tenant.