Catford Rhum Arrange Ltd v Shalwin Sun Real Estate Ltd

This Transcript is Crown Copyright. It may not be reproduced in whole or in part, other than in accordance with relevant licence or with the express consent of the Authority. All rights are reserved. HIS HONOUR JUDGE HODGE KC :

1. This is my extemporary judgment in a claim made by Catford Rhum Arrange Ltd (as claimant) against Shalwin Sun Real Estate Ltd, pending in the Property Trusts and Probate List of the Business and Property Courts in Manchester, under case number PT-2025-MAN-000119. By a Part 7 claim form issued on Tuesday 26 August, the claimant seeks a declaration that the defendant’s purported forfeiture of a commercial lease, dated 2 May 2023, of the ground floor commercial unit at 49 Deptford Broadway, London SE8 was unlawful. There are also money claims in respect of the defendant’s allegedly unlawful forfeiture, trespass, and breach of covenant. The claimant also seeks injunctive relief requiring the defendant to permit the claimant forthwith to go back into possession of the premises. There is an alternative claim for relief from forfeiture. Particulars of claim have been served setting out the basis for the claim. The principal relief proceeds on the basis that the purported forfeiture of the lease on 13 August 2025 by the defendant was unlawful. The claim for relief against forfeiture is pursued in the alternative.

2. On 26 August, the claimant also issued an application notice seeking an interim injunction requiring the defendant to permit the claimant to take back possession of its business premises forthwith, pending a trial of the claim for declaratory and injunctive relief and damages for unlawful forfeiture and trespass or, alternatively, for relief from forfeiture.

3. The application is supported by the first witness statement of Mr Samuel Stewart, dated 26 August 2025. He is a company director of the claimant. He explains that the claimant operates a small French bar and café from the premises. In the evening, it specialises in French food and West Indian drinks. As well as operating as a bar and café business, the claimant also runs the venue as a community hub, bringing together local residents, particularly young adults with learning or mental health difficulties; and it serves as a platform for young artists to showcase their work.

4. There has been a long-running dispute between the claimant and its landlord. That is because, in February 2024, the premises were flooded with sewage water. There is a dispute as to who was liable for that, and as to whether, as a result, the claimant was entitled to a rent suspension. On 22 October 2024, the defendant’s solicitors served a statutory demand on the claimant, asserting unpaid rent in a sum of some £7,361. From that point onwards, there were negotiations regarding the rental sums outstanding. However, the claimant continued to pay its rent; and the defendant accepted that rent, and made no attempts to return any of the rental payments.

5. The claimant accepts that there will be a shortfall, it says of some £2,800, against the defendant’s payment ledger. That results from the sums that have been withheld in 2024. Those sums are disputed by the claimant. On 13 August 2025, at around four in the morning, the defendant re-entered the premises and changed the locks. There had been no prior notification of the defendant’s intention to do so. The claimant was taken completely by surprise to find itself locked out of the premises later that day.

6. On 15 August, the claimant’s current solicitors, Eleven Law, wrote to the defendant’s solicitors, notifying them of the unlawful re-entry into the premises, which they said constituted a trespass. The defendant was asked to allow the claimant to resume occupation of the premises immediately, and to consent to an application to the court to resurrect the lease. The defendant’s solicitors were informed that interim injunctive relief would be sought if no agreement was reached. However, the defendant has not complied with that request; and, as a result, the claimant has been forced to issue these proceedings against the defendant.

7. For the claimant, Ms Martha Garcia (of counsel) has produced a detailed written skeleton argument, explaining the basis for the claimant’s application for interim injunctive relief to return to the premises. She submits that there is a serious issue to be tried; and that damages would not be an adequate remedy for the claimant. That because of both the damage to the claimant’s business, and also to its reputation, and the disruption to the operations of the claimant. Since this involves supporting vulnerable individuals and young creatives whose access to a safe and inclusive space is not easily relocated and replicated, damages cannot amount to an adequate remedy for the defendant’s allegedly unlawful forfeiture.

8. Ms Garcia submits that the balance of convenience lies firmly in favour of the grant of restoring the position to that which pertained prior to the unlawful forfeiture on 13 August. If all else fails, she would rely upon the restoration of the status quo. Ms Garcia points to the delay in issuing the claim form and application notice, resulting, in part, from the late August Bank Holiday Monday. However, she submits that the defendant has had adequate notice of this application. Although the proceedings have not given the defendant the required three clear days’ notice, they have, nevertheless, had sufficient time to respond. The urgency of the situation dictates that time should be abridged for the service of this application.

9. The court has received two lengthy, and detailed, letters from the solicitors acting for the defendant, Lawhive Legal Ltd, in London EC2. The first of those letters is dated yesterday (28 August 2025). It extends to no less than seven pages. It addresses matters under a number of separate headings: (1) attendance and procedural prejudice; (2) court directions and procedural fairness; (3) defective service under the Civil Procedure Rules; (4) claimant’s conduct, clean hands and equitable discretion; (5) rent arrears: indulgence not waiver; (6) legal title: equitable assignee rights; (7) rent suspension: no self-help remedies; (8) inadequate cross-undertaking in damages; (9) fixtures, chattels and consequential losses; (10) payment frequency breaches; (11) relief sought: and (12) conclusion.

10. Under the heading ‘Attendance and procedural prejudice’, the defendant submits the letter to place its position on record in advance of this hearing. It says that the defendant and its legal representatives are unable to attend the hearing due to the exceptionally short notice provided, the geographical distance between the defendant’s representatives and the Manchester Court Centre, and the defendant’s company director being abroad on pre-arranged commitments. The fundamental issue is said not to be geographical distance but a complete absence of fair preparation time. The defendant has been deprived of any reasonable opportunity to instruct appropriate counsel, prepare evidence, comply with the court’s own directions regarding bundles and skeleton arguments, or engage with the CE-filing system, as required.

11. The claimant’s delay in effecting proper service is said to have rendered compliance with standard court directions impossible, and forced the defendant into an untenable position of having to respond at 24 hours’ notice to complex interim relief proceedings. I pause to note that no reference is made to: (1) to the instruction of local counsel, or (2) reasons why the defendant has been able to address matters by way of a seven-page letter without putting in any witness statement evidence, verified by a statement of truth.

12. Of more consequence is what is said under the heading ‘Rent Arrears: Indulgence Not Waiver’. Paragraph 5.2 states: “The defendant issued formal demands for outstanding rent on 20 June 2024, 18 January 2025, 7 April 2025, and 11 April 2025.” At paragraph 5.4, it is said that far from waiving its rights, the defendant served a statutory demand on 22 October 2024. That is said to be “a clear enforcement step wholly inconsistent with any election to affirm the lease. Acceptance of part-payments thereafter was indulgence during ongoing enforcement proceedings, not waiver.” At paragraph 5.5, it is asserted that: “The legal principle is well-established that waiver of forfeiture must be unequivocal and made with full knowledge of the circumstances giving rise to the right to forfeit. The very act of issuing a statutory demand is enforcement of arrears, not affirmation of lease. The defendant’s subsequent commercial forbearance, while pursing formal enforcement through statutory process, cannot constitute the clear and unambiguous conduct required for waiver. The claimant consistently failed to honour the repayment commitment made in his own correspondence and has had ample time to set aside the necessary funds as acknowledged in his communications.”

13. I fully accept that waiver and forfeiture must be unequivocal, and made with full knowledge of the circumstances, giving rise to the right to forfeit. However, here it is clear that even on the defendant’s own case, it has made rental demands subsequent to the period to which the arrears of rent relate. Not only has it made those rental demands, but it has accepted the rent so demanded. The arrears relate to a period prior to the service of the statutory demand.

14. It is not correct, as a matter of law, that the subjective intention not to waive can, in some way, render the acceptance of rent anything other than a waiver of the right to forfeit as a matter of law. The defendant’s solicitors’ letter makes the point that if the claimant succeeds in obtaining interim relief, but ultimately fails at trial, the defendant’s substantial losses from continued occupation by a non-paying tenant would be irrecoverable. The inadequacy of financial protection is said to weigh strongly against granting interim relief. There would be force in that point if the defendant had pointed to any plausible defence to the assertion of waiver of the rent to forfeit. However, it has not done so.

15. The defendant asked the court to adjourn the hearing so as to permit the defendant a fair opportunity to comply with court directions and prepare its case following the late service of this application on 28 August. Alternatively, it invites the court to dismiss the interim injunction application on its merits, for lack of legal foundation, and the claimant’s failure to satisfy the requirements for equitable relief.

16. However, the fact is that there would be no point in adjourning this hearing if the defendant can point to no conceivable defence to the interim injunctive relief sought by the claimant. In my judgment, the letter of 28 August raises no conceivable defence to the interim injunction application. This is a clear case of waiver of the right to forfeit. There is no need for the court to consider either the grant of relief or the terms on which it should be granted. If this interim injunction were sought in aid of a claim for relief from forfeiture, then the court would clearly wish to consider terms as to the payment into court of all the rent and arrears. However, this is not a case where the claimant needs to rely on the right to claim relief from forfeiture. It is entitled to say that the forfeiture was unlawful because any arrears of rent had clearly already been waived by the landlord. The defendant asserts, at paragraph 12.2 of the letter, that on the substantive merits, the application lacks foundation. The reality, however, is that the defence to the claim for interim injunctive relief lacks any sound foundation in law. As a result, it cannot be said that the failure on the part of the claimant to effect service until the day before the hearing has created any fundamental, or any procedural, unfairness. In a detailed, seven-page letter, the defendant has failed to point to any conceivable defence to the claim for interim injunctive relief. As a result, I reject the defendant’s submission that procedural fairness requires an adjournment to permit the defendant time for proper preparation or, alternatively that interim relief should be refused on the merits, based on the claimant’s persistent breaches, inadequate financial covenant, and improper conduct.

17. If anything, the position, from the defendant’s perspective, becomes worse with the letter sent earlier today (29 August). As Ms Garcia submitted, the defendant’s position is entirely undermined by what is said at section 5 of the letter, headed ‘Waiver Arguments Lack Merit’. Paragraph 1 asserts that: “The defendant’s acceptance of rent and pursuit of arrears through statutory demand does not constitute waiver in the circumstance of this case. The defendant consistently pressed for payment of both current rent and arrears, making clear that the lease relationship continued subject to remedy of the breach.” Waiver does indeed affirm the continued existence of the lease; that is the whole meaning and effect of waiver. Paragraph 5.2 states: “The subsequent rent demands and acceptance of partial payments constituted forbearance, not waiver.”

18. The defendant’s conduct throughout demonstrated an intention to preserve the lease, whilst insisting upon compliance with its essential terms. That is a pretty fair definition of ‘waiver’. It is an objective demonstration of an intention to preserve the lease. That intention is manifested by the continuing demand for, and acceptance of, payment of rent post-dating any matter of which complaint is made by the landlord. The subsequent rent demands, and acceptance of partial payments, constitute waiver, and not simply forbearance. The defendant’s arguments for resisting the interim injunction application lack any legal cogency.

19. In those circumstances, it would just be a waste of the court’s time and resources, and the parties’ money, for the court not to grasp the nettle today and grant the interim injunctive relief which is sought by the claimant. Far from raising merely a serious issue to be tried, the claimant has demonstrated, to the court’s satisfaction, that the forfeiture was indeed unlawful, because any entitlement to forfeit for past arrears of rent had been waived by the continuing demand for, and acceptance of, subsequent gales of rent as they fell due.

20. Therefore, for those reasons, I propose to reject the defendant’s informal request for an adjournment. I will make an order substantially in the terms of the draft at pages 71 to 72 of the hearing bundle. The additions will be: (1) that the order should formally record that the court abridges time for service of the application; and (2) that the court rejects the defendant’s informal applications for an adjournment or dismissal of the application. The recitals should include reference to the court having read the defendant’s solicitors’ letters of 28 th and 29 th August. The order will then proceed in terms of paragraphs 1 and 2 of the existing draft.

21. As far as costs are concerned, the defendant’s unlawful conduct in first forfeiting the lease without valid grounds, and then refusing re-admission of the claimant to the premises, have necessitated this application. The application has succeeded. Costs should follow the event. There is no issue of the claimant’s conduct that should disentitle it to any part of its costs. I have looked at the costs statement. Unfortunately, due to pressure of business in today’s applications list, the attendance at court has far exceeded the estimate in the costs statement. Rather than two hours, it should be five. As a result, the costs statement needs to be adjusted upwards by £720. I am satisfied that the items in the costs statement are both reasonable and proportionate. Whilst the sums in issue are fairly small, the importance of this application to the claimant’s business is obvious. I will assess the costs summarily in the sum claimed, subject to an uplift of £720 to reflect the additional attendance at hearing time.

22. Since counsel does not know whether the claimant is registered for VAT, I will assess costs in the VAT-exclusive sum of £8,010.50 and add: “with VAT if applicable.” There are other aspects of the claim that are not resolved by the present interim order. Given the sums involved, and the nature of the issues, this is a case that should be in the County Court; and the County Court in London, where the property is situated. The order should therefore include provision for the claim to be transferred to the County Court at Central London. Nevertheless, this order will be made, and will regulate the position in the meantime. Therefore, that concludes this extemporary judgment. End of Judgment. Transcript of a recording by Acolad UK Ltd 291-299 Borough High Street, London SE1 1JG Tel: 020 7269 0370 [email protected] Acolad UK Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof