Powell v Bochas

The plaintiffs, Brian Charles Powell and Lisa Susan Powell, sought to enforce an option to renew a lease against the defendant, Bochas Pty Ltd, which was the lessor. The lease, which had a term expiring on 31 January 1995, contained a clause (cl.24.1) providing for a first option exercisable by notice in writing delivered by the lessee to the lessor not less than three calendar months prior to the expiration of the term. The plaintiffs did not give notice in writing as required but argued that their oral statement of intention to exercise the option during a telephone conversation on 28 October 1994, coupled with the defendant's conduct, should be sufficient to validate the exercise of the option. The court was required to decide whether the oral statement, combined with the defendant's conduct, was sufficient to constitute a valid exercise of the option.

The court held that strict compliance with the notice requirements of the option was necessary for it to be validly exercised. The plaintiffs could only succeed if they established that the defendant could not rely on the non-compliance with the written notice requirement. The court found that the male plaintiff did not fully appreciate the necessity for the notice to be in writing. While the male plaintiff did make a statement indicating an intention to exercise the option, the precise words used did not amount to a clear and unambiguous exercise of the option. The response by the defendant's representative, James, was merely an acknowledgment of the intention expressed and not an acceptance of an oral exercise of the option. The court also rejected the plaintiffs' claims regarding estoppel, false, misleading, or deceptive conduct, and unconscionability, concluding that the defendant was entitled to insist on strict compliance with the lease terms. Consequently, the court dismissed the plaintiffs' action and granted the defendant's counterclaim for a declaration that the option was not validly exercised.