Tue | Aug 22, 2017

CAC loses decade-old lawsuit

Published:Wednesday | October 26, 2016 | 10:00 AMTameka Gordon
Steven Marston, CEO of CAC 2000 Limited.

The Supreme Court has ordered air-conditioning firm CAC 2000 Limited to pay damages that equate to more than $55 million, plus interest, to X-Ray and Diagnostic Ultrasound Consultants.

CAC 2000 said in a market filing that judgment in the decade-old lawsuit handed down October 21, 2016 in favour X-Ray and Diagnostic, related to a fire in 2003 which destroyed equipment that CAC was engaged to service. The fire also damaged X-Ray and Diagnostic's premises.

Damages of US$372,100 and $568,186.64 plus loss of profits amounting to more than $7 million were awarded to X-Ray and Diagnostics, with interest charged at commercial rates.

The air conditioning firm has however sought a 42-day stay as its attorneys review the judgment.

CAC insurance will cover a portion of the damages.

"Our insurance with BCIC covers us up to $20 million. Anything over that, we will have to pay," CEO and chairman of CAC, Steve Marston told Gleaner Business. The rest will be reflected in the company's 2016 accounts, according to the market disclosure.

Although Marston conceded the judgment "is a little bigger than we anticipated," he said the company had enough resources to cover the rest.

"It will affect us - it is a big number - and it will set us back temporarily, but the business will continue," he said. "We had put down the money just in case so we have to tighten our belt and just continue."

The judgement follows a retrial ordered in 2013 after Supreme Court judge Roy Jones awarded X-Ray and Diagnostics just over $74 million, representing the replacement costs of equipment damaged in the fire and consequential loss of profits.

The retrial ordered by the Court of Appeal was held last December, with submissions made in January.

X-Ray and Diagnostics, which operates from Ripon Road in New Kingston, contracted CAC to provide equipment maintenance services for X-Ray and Diagnostic's air conditioning units that were purchased from CAC.

On May 11, 2003, combustible material within the fan coil of the air conditioning unit ignited and started a fire which destroyed a section of the X-ray company's premises, as well as several pieces of equipment it said were essential to its business.

tameka.gordon@gleanerjm.com