Section 118 of the Conveyancing Act 1919 (NSW) operates to annex a lessor's obligation to grant a new lease to the reversionary estate, making it enforceable against a subsequent registered proprietor, even where the agreement for a new lease is unregistered. The 'reversionary estate' for the purposes of s 118 includes the interest of a registered proprietor under the Real Property Act. Estoppel by convention in NSW is not confined to assumptions of fact but extends to assumptions as to the legal effect of particular agreements, notwithstanding the obiter dictum in Con-Stan Industries. A purported exercise of an option to renew a lease that is conditional upon the lessor agreeing to amendments to the terms of the renewed lease is not a valid exercise of the option but a counter-offer which, if accepted, creates a new agreement for lease.
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