International Knitwear had been a tenant of Kabob's pursuant to a written lease of commercial premises. The five-year term of the lease was to run from May 1, 1987 to the last day of April, 1992. By May 1, 1989, Knitwear's business was experiencing difficulties. As a result, its principal asked Kabob if it would agree to a reduction in rent. Wishing to help its tenant through a difficult time, Kabob agreed to a reduction to $1,000 per month. No rent was paid on December 1, 1991. On December 13 a bailiff entered and took possession of the premises under Kabob's warrant and on December 24 demanded arrears, interest, and payment in full from January 1, 1992. Knitwear sued for illegal distress and Kabob counterclaimed for the full amount of rent and other moneys owing.
At trial the judge held that the landlord's agreement to accept rent in a lesser amount created a promissory estoppel disentitling it to rent in the sum stipulated in the lease from May 1989 to December 1991.
- Did the landlord's agreement to accept less rent estop it from claiming the full amount under the lease?
Appeal allowed in part.
Southin, writing for the court, held that the finding of the judge on the matter of estoppel was correct, but that Knitwear's claim that they were unable to revive the obligation until the end of the lease in April was incorrect. She asked two questions relating to notice given to effect a purpose:
- Must the notice be for a reasonable period?
- If so, must the notice specify the period?
He held that the notice must be for a reasonable time, but need not be directly stated. Holding a one month notice was sufficient, he found Knitwear liable for rent in full beginning February 1 to the end of the term in April.
When notice is given to effect a purpose, the notice must be for a reasonable period but need not be dated.