No statutory provision on the termination of a lease of commercial premises stipulates that the cancellation of the lease is conditional upon providing proof, as part of the notice of cancellation, that the grounds for cancellation were fulfilled
The claimant (as the landlord) and the defendant (as the tenant) had agreed in their lease agreement for commercial space that the tenant would have the option to cancel the lease early, aside from the statutory grounds for cancellation as set out in Sec. 2308 of the Civil Code, also if the pharmacy installed on the rental premises were to account for negative EBITDA. The defendant eventually cancelled the lease agreement citing this very reason. As to the procedural aspects of cancellation (i.e., the binding content of the notice of cancellation, service of process, legitimate cause, etc.), the parties had not made any special arrangements regarding their rights and obligations in deviation from the law.
The claimant rejected the notice of cancellation, raising formal objections in which it argued that this particular reason for cancellation had not been agreed in the lease agreement with the requisite degree of specificity and intelligibility, so that this particular clause of the lease agreement was null and void; in addition, said the claimant, no proof had been rendered that the reason for cancellation was actually given. The claimant thus refused to take back the rental premises.
The dispute eventually ended up before the Supreme Court, which found that – notwithstanding the requirement that the notice of cancellation must give well-defined grounds for cancellation in terms of their concrete substance – there was no provision in the law which would require that the legitimate cancellation of a lease be conditional upon providing proof, as part of the notice of cancellation, that the grounds for cancellation were fulfilled, nor was it ever the purpose of the statutory rules on termination to create such an obligation. Failure to render such proof along with the notice of cancellation could not invalidate the notice of cancellation, or make it null and void.
For the notice of cancellation to be legitimate, the cited grounds of cancellation must be compatible with the law or, as the case may be, with the agreement between the parties, and must actually be fulfilled. However, the notice of cancellation is legitimate even if the actual existence of the grounds for cancellation are only proven by the cancelling party in the review procedure (as was the case here).
With a view to the above, the Supreme Court dismissed the claimant’s appeal on a point of law.
Source:
Judgment 26 Cdo 3329/2021 by the Supreme Court of 15 June 2022