The case of Stonewall Hotel Pty Ltd v Papantoniou [2017] NSWSC 964 considered whether an option to renew a commercial lease was properly exercised and whether a notice of exercise was properly served on the respondents. In this case, the first and second respondents were lessors of premises leased by the applicant, and the lease contained two options for renewal of the terms of the lease.

The lessor challenged the validity of the applicant’s service of notice to exercise the first and second options to renew the lease in 2010 and 2015, respectively. The lessee had served the first notice of exercise to renew the lease upon the lessor’s solicitor. Whilst there was no provision in the lease that expressly provided for service upon the solicitor, there was a provision that allowed for service in accordance with s 170 of the Conveyancing Act. The court held that service of the notice to exercise the first option was adequate notice to the lessor, even though the notice was sent to the office address of the respondent’s solicitor rather than to the Lessor directly. The evidence showed that the firm of solicitors were the effective agents of the lessor, and that they thereby had actual authority to receive a notice of exercise. Thus, the service upon an agent was an effective service upon the principal under the general law.

The second option to renew the lease, in 2015, was exercised by a notice of exercise sent over email. The lessors disputing the valid service had, in fact, received the notice of exercise of the second option sent by email. That exercise, too, was a valid and adequate exercise in accordance with general law. The plaintiff was thus entitled to a new lease.

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