Damages to Hotel in Västerås

Background

Bed & Breakfast i Västerås AB (the Hotel) rented premises for hotel operations from Fastighets AB Norrtull (the Landlord) in Västerås. The hotel business had been conducted since 2007. The Landlord, owned by OK economic association, manages and leases properties for the operation of OKQ8 stations. On the property in question, the Landlord had three tenants at the time of termination: the OKQ8 station, operated by the Landlord’s group company OK Retail AB, the Hotel, and a car rental company. The Landlord terminated the lease on July 9, 2021, for vacation by July 31, 2022. The reason for the termination was stated as "the premises will be used for another purpose." The Hotel vacated the premises and ceased its operations on July 31, 2022. Subsequently, the Hotel claimed damages due to the termination under the indirect protection of possession (Chapter 12, Section 57 JB).

Court of Appeal's Assessment

The Court of Appeal examined whether the Landlord had justified reasons to dissolve the lease agreement under the general clause in Chapter 12, Section 57, paragraph 4 JB. The Landlord argued that it had a need to ensure the existence and future of the OKQ8 station and that it was significantly more advantageous to change the purpose of use, thus having justified reasons to dissolve the lease agreement. The Court of Appeal concluded that the Landlord had legitimate reasons for the termination, but the Hotel's interest in retaining the premises outweighed the Landlord's interest in terminating the lease agreement. Therefore, the Hotel was entitled to damages.

In assessing the amount of damages, the compensation was evaluated in the Court of Appeal according to the market value method. The Hotel had submitted a valuation report by an appraiser to demonstrate the damage. The Landlord objected that the report was deficient, among other things, because the appraiser had not used any comparable objects in the valuation. The Landlord also claimed that the district court had erroneously made an estimated valuation of the damage since there were no evidentiary difficulties that allowed for such an assessment under Chapter 35, Section 5 of the Swedish Code of Judicial Procedure (RB).

The Court of Appeal clarified that when calculating the value of the business, the tenant must present evidence that provides a sufficient basis for the size of the damage. If such evidence is presented, it is up to the landlord to provide support for its objections that the tenant's evidence is insufficient. The court must then find a value that is the most probable based on the investigation. The tenant's burden of proof is thus not the value itself but the circumstances underlying the assessment of the value. It follows from case law that the court should do this and not through the application of Chapter 35, Section 5 RB.
The Court of Appeal found that the submitted valuation report, despite the lack of comparable objects, could serve as a basis for the assessment, given the appraiser's experience and the fact that the valuation was expertly conducted. The Landlord had also not presented its own evidence for its objections regarding the business's value according to the market value method. 

Therefore, the damages were determined by the Court of Appeal to be SEK 2,800,000.