Summary

In a successful appeal from an order for possession, the trial judge had incorrectly construed an option to renew a lease as if it expressly provided that the deadline for service of the option notice was the expiry of the contractual term. Further, the trial judge should have allowed the tenant to amend its defence to plead an alternative case that there had been a grant of a new periodic tenancy.

Facts

Appeal by the defendant ('the tenant') from an order for possession of the demised premises in favour of the claimant ('the landlord'). The premises were let to the tenant for a term of five years from 6 May 1995. By clause 6 of the lease, the tenant was granted an option to renew the lease on giving the landlord written notice of its desire to renew at any time after 6 May 1999 and not less than six months before the expiry of the term. On 5 November 1999 the tenant gave notice purporting to exercise that option, which was received by the landlord on 9 November 1999. The landlord successfully argued before the judge that the notice was ineffective because it had to be at least six months long, expiring no later than the last day of the contractual term, in order to comply with clause 6 of the lease. The judge also ruled that the tenant had insufficiently pleaded its alternative case that the landlord had granted a new periodic tenancy by accepting rent after May 2000, and that it was not appropriate to allow an amendment that would necessitate the adjournment of the trial. The tenant appealed on the issues of both construction and amendment.

Held

(1) The landlord's construction required the words "at any time after 6 May 1999" to be read as if they meant "at any time after 6 May 1999 but no later than 6 November 1999". That was such a fundamental change in the meaning of clause 6 of the lease that it required the clearest possible support from other parts of the lease or from the surrounding circumstances. However, no such support could be found. Therefore, the judge was wrong on the issue of construction. (2) In any event, this court would have allowed the appeal on the amendment issue. Although the judge was correct that the tenant's alternative case was not sufficiently pleaded, it was nevertheless a case that the tenant was entitled in the interests of justice to have heard. The judge's refusal of the amendment was disproportionate.

Appeal allowed.