The Supreme Court rendered the 107-Tai-Shang-2127 Civil Decision of April 3, 2019 (hereinafter, the “Decision”), holding that if a lessor indicates upon execution of the leasing agreement that there will be no renewal of the lease or a separate agreement shall be executed to renew the lease, still this is an expression of the lessor’s intent not to renew the lease and should be effective in preventing the renewal of the lease.
According to the facts underlying this Decision, the Appellee asserted as follows. He executed the leasing agreement at issue to lease the leased land occupied by Building A and Building B separately (hereinafter, “Lease A” and “Lease B”). Upon expiration of the lease, the Appellant delayed the demolition of Building A and Building B for the return of the land at issue. Therefore, a complaint was filed to request the demolition of the buildings and return the land. The original trial court ruled in favor of the Appellee. Dissatisfied, the Appellant filed this appeal.
According to this Decision, whether a fixed-term lease contract may become a lease contract with an indefinite term after it expires should be conditioned by the lessor’s expression of intent against this rather than by the collection of a payment for usage benefits. In addition, if the lessor indicates upon execution of a lease agreement that there will absolutely no renewal upon expiration of the lease agreement or that a separate agreement should be executed to renew the lease, this is still an expression of the lessor’s intent against the renewal of the lease. Therefore, it is difficult to conclude that this does not effectively prevent the renewal of the lease. Hence, the finding of the original trial court that there was no continued lease with an indefinite term after the two leases expired is not inappropriate since Article 11 of Lease A and Lease B between the two parties specifically stipulates that a separate agreement shall be executed to renew the lease and the provision on the implied renewal of a lease agreement under Article 451 of the Civil Code does not apply.
It was further pointed out in this Decision that when the parties mutually have a consistent expression of intent, be it explicit or implicit, an agreement is deemed established. If the parties have the same intent on essential points but do not express their intent on non-essential points, it shall be presumed that an agreement is established. If the parties do not have inconsistent intent on such non-essential points, the court shall make a determination based on the nature of the matter, as specifically stipulated under Article 153 of the Civil Code. It is understood that the Appellee submitted a request to apply for the renewal of the lease and requested the least agreement to have a term of five years. The Appellee did not respond to the Appellant’s renewal matter concerning the lease of Land A, but responded to the Appellant that had leased Land B by indicating that the Appellee was only willing to renew the lease for one year or two years. However, the Appellant failed to sign and return the lease agreement as instructed by the Appellee. These are facts lawfully recognized by the original trial court. Therefore, the original trial court concluded that both parties failed to enter into a lease agreement on the land at issue after Lease A and Lease B expired since the term of lease, which was not a factor of the lease agreement between both parties, was also included in the essential points for the lease agreement and was not agreed between the parties through their expression of intent. Since this was not legally inappropriate, it was concluded that since the Appellant’s appeal was groundless, the appeal was dismissed.