The applicant landlord sought a declaration that rental arrears were not released or forgiven by a lease extension agreement entered into with the respondent tenants.
The tenants argued that the arrears were wiped out and that they were entitled to a separate allowance under the agreement.
Applying the objective theory of contract formation and considering the factual matrix, the court found that the arrears were folded into the increased monthly rent and that the tenants were not entitled to a separate allowance without corresponding consideration.
The court granted the landlord's application for declaratory relief.
