HKK and Collotype concluded a written lease agreement on 27 September 2004 for premises at 2 Jan van Riebeeck Avenue, Paarl. The lease was for 10 years and 3 months (1 October 2004 to 31 December 2014). Clause 3 purported to grant Collotype a "first option" to lease the premises for a further 10 years, subject to conditions including that a "new rental Agreement, acceptable to the LESSOR be negotiated." On 31 March 2012, approximately 7.5 years into the lease, Collotype vacated the premises and stopped paying rent. HKK alleged this constituted repudiation and claimed damages. Collotype defended on the basis that clause 3 was a void option that could not be severed from the lease, rendering the entire agreement invalid. The clause was modeled on clauses in earlier leases between Collotype and the previous landlord (MMB), which had always been implemented through negotiation of new leases. Evidence showed that Collotype would not have agreed to a 20-year lease at inception; the 10-year period itself required significant persuasion from the Australian holding company.