The Court of Appeal was asked to consider this question in the case of Brar v. Thirunavukkrasu, in which Judgment was handed down yesterday.
The answer was an emphatic YES by a unanimous decision of the Court of Appeal.
Commercial Rent Arrears Recovery or CRAR, as it is known, was introduced in 2014 in place of the ancient remedy of distraint. It is a statutory procedure which enables a landlord to recover rent arrears from tenants of commercial premises, provided that there is a written lease between the parties in place.
Broadly speaking, a landlord may serve a notice of enforcement, if there are arrears of rent, giving at least 7 days for the tenant to pay the arrears. An enforcement agent may take control of goods at the premises or enter a controlled goods agreement with the tenant (under which the tenant can retain control of the goods provided it does not remove or dispose of them until the arrears are paid).
However, as decided by the Court of Appeal, if a landlord commences the procedure to exercise CRAR then it will waive its right to forfeit the lease (bring the lease to an end by re-entering the premises) for those rent arrears.
The Court of Appeal has provided clarity on the law, taking the view that the exercise of CRAR amounts to an "unequivocal act" confirming the landlord's decision to treat the lease as continuing, which is inconsitent with an election to forfeit the lease.
Objectively, the admitted facts were consistent only with an intention on the part of the appellants to treat the lease as continuing because they plainly intended to exercise CRAR.