Carter v Mackey Motels Pty Ltd - [2024] QCA 68

SUPREME COURT OF QUEENSLAND

CITATION:

Carter & Anor v Mackey Motels Pty Ltd [2024] QCA 68

PARTIES:

GARY JOHN CARTER AND WENDY MAREE KLEIN-CARTER AS TRUSTEES FOR THE CARTER FAMILY TRUST
(appellants)
v
MACKEY MOTELS PTY LTD
(respondent)

FILE NO/S:

Appeal No 9194 of 2023
SC No 7 of 2016

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane – [2023] QSC 128 (Freeburn J)

DELIVERED ON:

30 April 2024

DELIVERED AT:

Brisbane

HEARING DATE:

9 February 2024

JUDGES:

Morrison and Dalton JJA and Applegarth J

ORDER:

The appeal be dismissed with costs.

CATCHWORDS:

REAL PROPERTY – TORRENS TITLE – LEASES – GENERALLY – where the appellants were the lessees of a motel – where the appellants refused to pay rent and insurance premiums that the respondent had incurred – where the respondent gave the appellants 17 days’ notice to deliver up possession of the motel – where the trial judge held that the 17 day period was reasonable and the appellants breached an essential term of the lease by not paying rent – where the decision not to pay rent was a ‘tactic’ – whether 17 days’ notice to rectify the breach of the lease was reasonable

REAL PROPERTY – TORRENS TITLE – LEASES – OTHER MATTERS – where the appellants had an obligation to keep the motel in good and substantial repair – where the appellants submit that the respondent had an obligation to take reasonable action to ensure that the motel is kept in a good and substantial structural state and condition – where that obligation was subject to the appellants’ compliance with its obligation to keep the motel in good and substantial repair – where the appellants pointed to 21 defects that it alleged were the responsibility of the respondent – where the trial judge held that there was insufficient evidence to find that the respondent breached the repair and maintenance provisions of the lease – where the trial judge was not satisfied that any of the alleged breaches in relation to repair and maintenance caused any significant financial loss – whether the trial judge erred in his interpretation of the parties’ respective obligations to repair and maintain the premises – whether the trial judge erred in finding that the global loss the appellants claimed was caused by the alleged breaches rather than other causes

INSURANCE – THE POLICY – THE INSURED – where, prior to the appellants becoming lessees, the motel was owned and operated by the same entity – where the respondent thereafter became the registered owner of the motel – where the appellants argued that the lease required the respondent to take out insurance in the appellants’ name – where the appellants argued that the insurances held by the respondent were “substantially different” to the policy held prior to the commencement of the lease – where the trial judge held that the insurances were not “substantially different” from the prior policy – whether, as a matter of construction,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Carter v Mackey Motels Pty Ltd

Details

AGLC: Carter v Mackey Motels Pty Ltd [2024] QCA 68
Case: [2024] QCA 68
Decision Date: 30 April 2024

CaseChat Overview and Summary

In the case of Carter v Mackey Motels Pty Ltd, the dispute centred around the obligations of the lessees, the Carters, and the lessors, Mackey Motels Pty Ltd, in relation to a motel lease. The Carters, as lessees, had refused to pay rent and insurance premiums, prompting Mackey Motels to issue a 17-day notice to deliver up possession of the motel. The trial judge found that the 17-day period was reasonable and that the Carters had breached an essential term of the lease by not paying the rent, which they had done as a tactical move. The case also delved into the obligations of both parties regarding the maintenance and repair of the motel premises, the adequacy of insurance coverage, and the respondent’s right to re-enter the property. Furthermore, the Carters alleged interference with their telecommunications systems when Mackey Motels attempted to re-enter the premises, and there were disputes over the value of chattels left by the Carters at the motel and their loss of profit claim.

The legal issues before the court included the reasonableness of the 17-day notice period for the Carters to rectify their breach of the lease, the interpretation of the parties’ respective obligations to repair and maintain the premises, and whether the trial judge correctly assessed the alleged breaches and their financial impact. Additionally, the court needed to determine if the insurance policies held by Mackey Motels were substantially different from those held prior to the lease and whether the respondent’s entry to re-enter the motel constituted trespass. Lastly, the court had to interpret the lease concerning the definition of “chattels” and the obligations to purchase certain items upon lease termination.

The court found that the 17-day notice period was reasonable given the nature of the breach, which was a tactical refusal to pay rent rather than a failure to repair. Regarding the maintenance and repair obligations, the court upheld the trial judge’s findings that there was insufficient evidence to conclude that Mackey Motels breached its obligations under the lease. The court also determined that the insurance policies were not substantially different from the prior policy and that there was no trespass as the respondent had a right to re-enter the premises. Finally, the court found no error in the primary judge's interpretation of the lease regarding the definition of “chattels” and the obligations to purchase certain items.

ORDERS:
The appeal was dismissed with costs.

Orders

Orders of the court

The appeal be dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The trial was a major battle, occupying several days of evidence. It generated witness statements, expert reports, and thousands of pages of other evidence. The parties’ closing written submissions in April 2023 occupy 250 pages. The appeal record book runs to 4,165 pages.The primary judge’s decision The primary judge’s decision identified issues about insurance, the condition of the building, the events leading up to the appellants leaving the motel, their claim for the value of chattels left by them at the Motel on 5 October 2016, and their loss of profit claim. The primary judge found unproven the appellants’ case that “the insurances held by the Landlord” between 2011 and 2016 were “substantially different” to “the Galea Policy” that the motel’s owners and operators, Paul and Joyce Galea, held immediately prior to the Lease commencing in April 2002. The respondent, therefore, was entitled to claim from the appellants the insurance premiums they paid and to obtain judgment on their counterclaim in the sum of $7,016.13 plus interest. The primary judge considered the appellants’ obligations under clause 12 of the Lease and the respondent’s obligations under clause 14.3. He also considered a large body of evidence about the state of the building and whether there was evidence that the appellants had complied with their obligations under clause 12, so that the respondent was obliged to take reasonable action to ensure the building was kept “in a good and substantial structural state and condition”. The primary judge considered 21 items that the appellants alleged were the responsibility of the respondent. They were “a mixed bag of defects”.[2] Each alleged breach of the landlord’s obligation depended upon a consideration of the evidence about the defect, its cause and the repairs that were required. Another issue was the meaning of “a good and substantial structural state and condition” in the context of the Lease’s provisions.[2]Carter at [97]. The primary judge remarked upon the appellants’ lack of evidence to prove that they complied with clause 12.1. The judge reached conclusions about each of the 21 items that the appellants contended required work, and which were alleged to be the responsibility of the respondent. The primary judge’s conclusions are set out in a lengthy table in his reasons, and I shall not reproduce it.[3][3]Carter at [116]. In summary, the conclusion was reached that the evidence did not enable him “to make a finding that Mackey Motels breached the repair and maintenance provisions in clause 14.3”. The primary judge next turned to the events leading to the Lease’s termination. His Honour concluded that a period of 17 days was a reasonable time for the appellants to remedy the breach of lease that was subject to the notice to remedy dated 25 July 2016. The breach that had to be remedied was payment of that month’s rent, which the appellants had not paid as a tactic. The breach relied on was not a failure to repair which might take weeks or months to remedy.

Ratio Decidendi

Legal Principle Established

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CITATION:	Carter & Anor v Mackey Motels Pty Ltd [2024] QCA 68
PARTIES:	GARY JOHN CARTER AND WENDY MAREE KLEIN-CARTER AS TRUSTEES FOR THE CARTER FAMILY TRUST (appellants) v MACKEY MOTELS PTY LTD (respondent)
FILE NO/S:	Appeal No 9194 of 2023 SC No 7 of 2016
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane – [2023] QSC 128 (Freeburn J)
DELIVERED ON:	30 April 2024
DELIVERED AT:	Brisbane
HEARING DATE:	9 February 2024
JUDGES:	Morrison and Dalton JJA and Applegarth J
ORDER:	The appeal be dismissed with costs.
CATCHWORDS:	REAL PROPERTY – TORRENS TITLE – LEASES – GENERALLY – where the appellants were the lessees of a motel – where the appellants refused to pay rent and insurance premiums that the respondent had incurred – where the respondent gave the appellants 17 days’ notice to deliver up possession of the motel – where the trial judge held that the 17 day period was reasonable and the appellants breached an essential term of the lease by not paying rent – where the decision not to pay rent was a ‘tactic’ – whether 17 days’ notice to rectify the breach of the lease was reasonable REAL PROPERTY – TORRENS TITLE – LEASES – OTHER MATTERS – where the appellants had an obligation to keep the motel in good and substantial repair – where the appellants submit that the respondent had an obligation to take reasonable action to ensure that the motel is kept in a good and substantial structural state and condition – where that obligation was subject to the appellants’ compliance with its obligation to keep the motel in good and substantial repair – where the appellants pointed to 21 defects that it alleged were the responsibility of the respondent – where the trial judge held that there was insufficient evidence to find that the respondent breached the repair and maintenance provisions of the lease – where the trial judge was not satisfied that any of the alleged breaches in relation to repair and maintenance caused any significant financial loss – whether the trial judge erred in his interpretation of the parties’ respective obligations to repair and maintain the premises – whether the trial judge erred in finding that the global loss the appellants claimed was caused by the alleged breaches rather than other causes INSURANCE – THE POLICY – THE INSURED – where, prior to the appellants becoming lessees, the motel was owned and operated by the same entity – where the respondent thereafter became the registered owner of the motel – where the appellants argued that the lease required the respondent to take out insurance in the appellants’ name – where the appellants argued that the insurances held by the respondent were “substantially different” to the policy held prior to the commencement of the lease – where the trial judge held that the insurances were not “substantially different” from the prior policy – whether, as a matter of construction,…