Firm to pay K1.8mil in damages

The National National

By TREVOR WAHUNE
THE Waigani National Court has ordered Boroko Motors Ltd to pay Meridian Motors K1,830,802 in damages for a breach of contract.
Justice Derek Hartshorn yesterday upheld that Boroko Motors (BML) had failed to leave a property owned by Meridian Motors Limited (MML) in a satisfactory condition –based on a letter dated Oct 30, 2014.
The letter relied on by MML was part of an agreement dated July 1, 2011, entered by BML to lease the property for five years.
An issue arose on March 19, 2014, when BML purported to terminate the lease due to an alleged rejection of the lease by MML, and vacated the premises. MML claimed unpaid rent and damages from BML.
BML, however, had cross claimed against MML and was seeking damages for a breach of contract.
BML had submitted that MML had failed to mitigate its losses, and that it was seeking to rent the premises at a rental significantly higher than the market rental in 2014.
BML claimed that MML failed to take reasonable steps to lease the premises at a reasonable rent for a reasonable term.
MML, however, submitted that it initially informed prospective lessees or sub-lessees that the rent was K160,000 to K180,000 a month while BML was still in possession of the premises as it wanted to recoup some of its expenditure.
“From considering the evidence, I am not satisfied that BML has proved on the balance that of probabilities that MML did not take responsible steps to lease the premises at a reasonable rent for a reasonable term,” Justice Hartshorn said.
The court found that BML vacated the premises in a state of disrepair. MML claimed that the estimate repair was K412,000.
“In the absence of the contrary, I am satisfied that MML has satisfactorily made out its claim for the cost of placing the premises in a satisfactorily condition,” Justice Hartshorn said.
“I am satisfied that MML did not commit any breach under the lease with BML.”
Justice Hartshorn ordered that:

  • The cross claim be dismissed;
  • That BML pay the sum of K221,000 for rent; K1,197,801 for a statement of claim; K412,000 for the cost of bringing the premises into a satisfactory condition.