Carter v Mackey Motels Pty Ltd

The matter before the court involved a dispute between Carter, the lessee of a motel, and Mackey Motels Pty Ltd, the lessor. The Carters alleged multiple breaches of the lease agreement by Mackey Motels, including an obligation to pay insurance premiums, failure to maintain the motel in good repair, repudiation of the lease, loss of profits due to breaches of the lease, and the compulsory purchase of chattels. Mackey Motels brought a counterclaim for outstanding outgoings. The court was tasked with determining whether the Carters were obligated to pay insurance premiums as outgoings, if the insurance policy obtained by Mackey Motels was substantially different from prior policies, if Mackey Motels had a duty to maintain the motel in good repair, if there was repudiation of the lease or trespass, and if the loss of profits claimed by the Carters were due to breaches of the lease. The court also had to decide if a compulsory purchase of chattels was required in the absence of an annexed inventory.

The court found that the Carters were not obligated to pay insurance premiums as outgoings, as the insurance policy obtained by Mackey Motels was not substantially different from prior policies. Regarding maintenance, the court held that Mackey Motels was required to take reasonable action to ensure the motel was in good and substantial structural state and condition, but was not obligated to expend on capital works. The court found that there was no evidence of structural damage to the motel. Regarding repudiation and trespass, the court found that the Carters were given a reasonable time to comply with the notice to remedy breach of covenant and there was no sufficient evidence to demonstrate repudiation or establish the cause of action of trespass. The court found that there was no discernible cause of action in the plaintiffs’ pleadings concerning the diversion of the phone line. Regarding loss of profits, the court found that there was no evidence that the alleged breaches caused loss or that the Carters would have exercised the option but for the alleged breaches of lease. Finally, the court found that a compulsory purchase of chattels was still required by the lease in absence of the annexed inventory.

The court dismissed the Carters’ claims and ordered that Mackey Motels was entitled to judgment on the counterclaim in the sum of $7,016.13 plus interest. The court will hear the parties on the form of the orders, including the calculation of interest, and costs.