12 Days of Christmas 2025 – Day 4

Hobbycraft Trading Limited v Ropemaker Properties Limited (County Court, 6 August 2025)

On Day 4 of our 12 Days of Christmas lease we take a look at a case dealing with forfeiture through a restructuring lens.

In this case the tenant, Hobbycraft, proposed a Company Voluntary Arrangement (CVA), a restructuring tool designed to help a company to address its financial difficulties in an effort to avoid an insolvency.

The landlord lawfully forfeited the lease after Hobbycraft proposed its CVA, under which it was proposing to fully meet its obligations to the landlord, with the only change being an adjustment from quarterly to monthly rent payments.

After the forfeiture, Hobbycraft sought relief from forfeiture and an interim injunction to regain possession of the property pending the outcome of its relief application.

The County Court granted an interim injunction requiring the landlord to allow Hobbycraft back into possession pending determination of its claim for relief from forfeiture. The Judge held that the ordinary American Cyanamid principles applied even though the forfeiture had been lawful. This meant that the Judge had to consider whether there was a serious issue to be tried, the adequacy of damages and the balance of convenience between the parties. In considering these principles, the Judge decided:

1. There was a serious issue to be tried regarding Hobbycraft's application for relief – it could not be determined at an interim stage that Hobbycraft was insolvent, and relief was discretionary.
2. Damages would not be an adequate remedy for Hobbycraft, as it had no entitlement to them.
3. The overall balance of convenience favoured granting the interim injunction – Hobbycraft's cross-undertaking in damages, though potentially of limited value, was not a sufficient reason to refuse relief since the landlord would continue to receive rent and other sums due, and it was unrealistic to assume the landlord would secure a new letting in the meantime.

Landlords should carefully assess the substance of a CVA before reacting, as forfeiture may not always be the most commercially or legally sound response. Clearly the courts are willing to intervene even when forfeiture is lawful, especially if the tenant is not seeking to avoid its obligations – there is a balance to be struck between landlords’ rights and tenants’ restructuring efforts. Although these applications turn on their facts, the approach taken in this case may be enlightening for others with similar cases.

And now for your reward of a festive joke: What do you call an elf who sings? A wrapper!