when can you terminate an option to continue a tenancy agreement?

In Allsvelte Pty Ltd v Cassegrain Wines Pty Ltd [2015] NSWSC 1370 the issue of whether a sublessor could terminate an option arose. The circumstances were as follows: the defendant leased a winery and under the lease granted a registered sublease for a three year term plus a three year option to the sublessee in order to run a restaurant. The sublessor terminated the option because the sublessee failed on numerous occasions to make payment in a timely fashion.

The Court decided that the termination was legal because the sublessor had adhered to requirements within s 133E of theConveyancing Act 1919 and clauses within the sublease. Foremost, that as required by s 133E notice had been served on the lessee in respect of the breach. Secondly, as per the sublease at the time of the option the lessee had rent still outstanding placing the party in breach, giving rise to the termination of rights. Finally, the lessee’s rights to relief were extinguished under s 133E(4). The Court also decided that granting of relief under s 133E(4) is a discretionary power that would only be provided in cases where it would lead to justice between parties. The Court found relief would not provide justice under the circumstances of the case.

%d bloggers like this: