The applicant landlord sought an order declaring that the respondent tenant failed to validly exercise an option to release a portion of its leased premises.
The lease required the tenant to provide written confirmation from the federal government of a loss of expected funding by a specific date to exercise the option.
Due to the COVID-19 pandemic, the government delayed its budget and the tenant could not provide the required confirmation by the deadline.
The court held that the tenant's purported exercise of the option was invalid, as the lease allocated the risk of funding uncertainty to the tenant.
The court also rejected the tenant's arguments of frustration and relief from forfeiture, ordering the tenant to pay substantial indemnity costs.
