Bundaberg: Court rules in favour of landlord in long-running Oscar Motel dispute

A long-running dispute over who was responsible for repairing defects including cracked tiles and toilets in a well-known Bundaberg motel was finally resolved by the Supreme Court.

A long running dispute over who was responsible for repairing defects including cracked tiles and toilets in a well-known Bundaberg motel was finally resolved by the Supreme Court on Tuesday.

A long-running dispute between the owner and tenant of a well-known Bundaberg motel has reached a conclusion with a court dismissing the tenant’s claims that failures to upgrade the motel had caused them to lose millions of dollars in revenue.

The dispute dates back to July 2016 when Gary and Wendy Carter, who were tenants running Oscar Motel for the landlord, Mackey Motels Pty Ltd, refused to pay two months’ rent and about $7000 in insurance premiums owed to the landlord.

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A long running dispute over who was responsible for repairing defects including cracked tiles and toilets in a well-known Bundaberg motel was finally resolved by the Supreme Court on Tuesday.

Queensland Supreme Court documents said the Carters had withheld payment as a “tactic” to force the landlord to perform repairs and renovations they said was causing the motel to lose business to other businesses in the surrounding area.

Legal notices requiring the Carters to pay the balance owing in addition to legal fees met no response, and they eventually gave up possession of the motel to Scott Mackey, the director of Mackey Motels and award-winning real estate agent, in August 2016.

Soon afterwards, in October 206, the Queensland Civil and Administrative Tribunal ordered the Carters to pay the outstanding rent to Mackey Motels, which then took the matter to the Supreme Court in order to obtain the $7000 payment for the insurance premiums.

Court documents note that the proceedings then “blossomed into a major piece of litigation” in which both parties claimed the other had not met their obligations in keeping the motel in good condition.

Among the 21 defects named by the Carters, which they contended were the landlord’s responsibility to repair, were cracked toilet bowls, leaking shower cubicles, a sagging ceiling, tiles falling off the front patio and steps area of the motel and rust holes in the roof guttering.

A 2023 Supreme Court trial heard a 2013 Star Ratings Report said the upgrades to the motel rooms were needed in order to secure a 3.5 star rating and meet customer expectations, and a lack of improvements between 2011 and 2016 caused it to be “left behind” by other businesses including the neighbouring Acacia Motor Inn which had undergone renovations in that time.

Director of MAckey Motels and award-winning Bundaberg real estate agent Scott MAckey said the Court of Appeal's decision was "so clear cut favouring and vindicating" his company.

The Carters claimed that Mackey Motels’ failure to perform the repairs and upgrades and their eviction from the property cost them about $2 million in revenue.

However, the judge found that the defects submitted by the Carters were not structural problems with the motel and thus not the responsibility of the landlord, and were in fact the Carters’ responsibility as tenants under the lease.

After being ordered to pay Mackey Motels the sum of $7016.13 plus interest and court costs, the Carters mounted an appeal which, among other grounds, disputed the judge’s findings on the responsibility of repairing the defects.

On Tuesday, April 30, the Court of Appeal judge dismissed the Carters’ appeal and ordered them to pay all legal costs incurred by Mackey Motels.

Mr Mackey said the Supreme Court and Court of Appeal decisions were clear vindication of his long-held position that Mackey Motels were not responsible for the failings of the motel under the terms of the lease.

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“It is a matter of record now,” Mr Mackey said.

It was so clear cut favouring and vindicating us.

“...We were awarded Indemnity costs in the Supreme Court case and then costs again in the appeal ... so there is no doubt in who was right and who was wrong.”

Gary Carter was contacted for comment.