The demise of high street retail and the insolvency of household names, including Woolworths, BHS, and more recently Debenhams and Monsoon has been a real headache for property owners.
The moratorium created by administration ties the hands of landlords, preventing them from forfeiting leases without first having obtained the consent of the administrator or the leave of the court.
When a landlord (or indeed any creditor) comes to court asking the court to exercise its discretion and dis-apply the moratorium, the court has to undertake an exercise of balancing the impact upon both parties weighing up the rights and property interests of the landlord on the one hand and the interests of creditors on the other.
If a tenant enters voluntary liquidation, a landlord can forfeit the lease without permission of the Court. But if the lease is a valuable asset an insolvency practitioner can apply to Court for relief from forfeiture to enable that asset to be sold.
A similar balancing exercise is required to ascertain whether the property should be returned to the landlord and the lease forfeit or whether the lease should remain in existence to enable the tenant to remain in occupation or, as in the case of SHB Realisations Limited v Cribbs Mall Nominee (1) Ltd  WLUK 588 to enable the lease to be assigned and monies paid into the insolvent estate.
In SHB, HHJ Ralton sitting in the Bristol County Court granted conditional relief from forfeiture to the insolvent tenant of a retail unit. It was unusual order because the tenant was undeniably in breach of a covenant in its 125 year lease to keep the premises open. In such a scenario the landlord might reasonable expect the Court to allow the lease to be forfeit. Especially, as in this case, the tenant acknowledged that it was in breach of covenant and that the breach would not be remedied.
Whilst the Judge granted relief, it was subject to a condition that relief only be granted for 3 months to allow the tenant to complete an assignment of the lease and if not completed during that period the lease would be forfeit.