June 13, 2021 court of first instance - Orders
Claim No. CFI 059/2020
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
FIX SENSE MANAGEMENT LLC
Claimant
and
(1) SUNSET HOSPITALITY HOLDINGS LIMITED
(2) SUNSET HOSPITALITY GROUP HOLDINGS LIMITED
Defendants
ORDER WITH REASONS OF CHIEF JUSTICE ZAKI AZMI
UPON the judgment of Justice Sir Jeremy Cooke dated 10 January 2021 (the “Judgment”)
AND UPON the Order of Justice Sir Jeremy Cooke dated 17 March 2021 refusing permission to appeal against the Judgment
AND UPON reviewing the Claimant’s Second Appeal Notice filed on 7 April 2021 against the Judgment (the “Second Permission Application”)
AND UPON reviewing the Defendants’ written submissions in opposition to the Permission Application dated 26 April 2021
AND UPON hearing Counsel for the Claimant and Counsel for the Defendants at a hearing on 2 June 2021
AND UPON reviewing the relevant documents on the Court file
IT IS HEREBY ORDERED THAT:
1. The Second Permission Application is dismissed.
2. The Claimant shall pay the costs of the Second Permission Application on the standard basis, to be assessed by a Registrar if not agreed.
Issued by:
Nour Hineidi
Registrar
Date of issue: 13 June 2021
At: 12.30pm
SCHEDULE OF REASONS
1. This is a second application made seeking permission to appeal against the decision of the Court of First Instance refusing an application for immediate judgment.
2. The first application which was made before the judge hearing the application for Immediate Judgment was refused.
3. Before going into the merits of the application, it is good for me to remind parties that this being a matter relating to immediate judgment, that we refresh our minds as to when or in what circumstances are immediate judgment granted. Immediate judgment can be made by a Claimant seeking judgment in its favour without going through a trial, or by the Defendant to have the claim dismissed, again, without trial. Under the Rules of the DIFC Courts (“RDC”) Immediate judgment is provided for under Part 24. RDC r.24.1 allows the court to grant immediate judgment against a Claimant or Defendant if it considers that the Claimant has no real prospect of succeeding on the claim or issue or the Defendant has no real prospect of successfully defending the claim or issue. There is an overriding ground to give an Immediate Judgment and that is where there is a compelling reason why the case or issue should be disposed of summarily without a trial.
4. As to whether a Claimant or Defendant has any real prospect of succeeding in his claim or succeeding in defending the claim, there have been a number of decisions ...refer to GFH Capital Ltd. v Haigh [2004] DIFC CFI 020 approved by the Court of Appeal in Investment Group Private Ltd v Standard Chartered Bank [2018] (DIFC CA 002) where JSC VTB Bank v Skurikhin [2014] EWHC 271 was referred and relied on. I do not need to recite in detail those principles discussed. Suffice for me to remind the parties that terms such as “realistic” as opposed to “fanciful” prospect” the meaning of those words used in the RDC r.24.1. We are reminded that we must not conduct a mini trial, without disclosure and by oral evidence. Also, the Court should avoid being drawn into an attempt to resolve conflicts of facts which are normally resolved at trial. It may however take into consideration evidence that can reasonably be expected to be available at trial. Allegation of fraud is something that can only be proven at trial. On the other hand, it was also said that dispute on the law and construction of a document, without more, may be suitable for summary determination. Most importantly, where there are disputes of facts required to determine the issues in the case, the case must go for trial. These are merely some of the instances to be considered in an application for where immediate judgment.
5. In this matter before me, the Claimant/Applicant sought for part of the Defendants’ defences to be struck out and then the granting of the declaration which it sought.
6. We revert to the main application which is to seek permission to appeal against the decision of the Judge of First Instance. The purpose of requiring permission to appeal, which in the old language is referred to as “leave to appeal”, is to act as a filter so that not every decision of a court is open to being appealed to the appellate court. This is to prevent clogging up at in the appellate court. Hence, the RDC sets out the threshold that an intended appellant has to satisfy before he is allowed to appeal. This is provided for under RDC r. 44.19; permission may only be given where the lower court or the appeal court considers the appeal would have the real prospect of success or there is some compelling reasons why the appeal should be heard. Again, there are several cases setting guidelines to overcome this threshold.
7. The Judge at first instance refused permission to appeal and the Claimant / Appellant now has made a further application for permission to appeal to the Court of Appeal under RDC r.44.9. It also sought for an oral hearing be given under Rule r.44.17, which request was granted.
8. I suggested to both counsel that my duty is to decide the application as if the Judge at first instance was doing so. This application, normally referred to as the second application, is not an appeal from the decision of the Judge of first instance. That being so, it now becomes my duty to peruse the grounds of decision refusing the application for immediate judgment together with the facts and laws submitted at the hearing of the application for immediate judgment, in the way that the Judge at first instance hearing an application for permission to appeal would do so. I would be practically hearing the application for permission to appeal de novo. It however does not prevent me from looking at the judgment of the Judge of First instance which rejected the Claimant’s first application. To this suggestion both counsel agreed.
9. The Claimant, who is the Applicant, submitted six reasons why the Judge at first instance erred in refusing the application for immediate judgment. Before me, learned counsel seemed to merely reiterate what he had submitted before the learned Judge.
10. We must also bear in mind that finding of facts by a trial judge is normally accepted as found by the Judge of first instance. In this case before me, for the purpose of deciding this application for permission to appeal, I will accept the findings by the learned Judge without reviewing them; a. At this stage it is not for me to relook at the finding of facts by the learned Judge.
11. I have read through the grounds of judgment of the Judge of first instance whereby he rejected the application for immediate judgment. he learned Judge’s in his judgment briefly cited the facts relevant to his decision rejecting the application for permission to appeal. This is what he said:
“This is an application for permission to appeal against my Judgment of 10 January 2021 in which I dismissed the Claimant’s application for summary judgment on part of the claim in this suit. The Claimant sought an immediate declaration that the First Defendant (“Sunset RAK”) had unlawfully terminated the HOA dated 1 July 2016, summary judgment in respect of damages for non-payment of fees, an order for the transfer of a 2.5% shareholding in Sunset RAK and the striking out of a series of paragraphs in the defence of the two Defendants on the basis that they disclosed no reasonable grounds for defending the claim and/or were an abuse of process and were likely to obstruct the fair disposal of the proceedings. At paragraph 3 of my judgment, I described this as an optimistic application because some obvious factual issues arose in relation to the payments alleged to be due and the circumstances surrounding the arrangements between the parties and the termination of the HOA. It appeared to me then, as it appears to me now, that such matters are not capable of resolution without a trial at which full evidence can be heard and tested in cross examination.”
12. The Judge then dealt ground by ground raised by the Claimant / Appellant.
(a) On ground 1, the Claimant / Applicant contended that the Judge erred in not wanting to summarily decide on the application of United States Bankruptcy Court of New York in In Re Kopel regarding the application and enforceability of cross default clauses in commercial agreements. To me, this being a non-Commonwealth decision, and the facts of that case against the facts in the current case may not be similar, the issue can only be decided after the judge has heard the facts and perhaps compare them with the facts in In Re Kopel... more detailed discussion is found in the judgment of the learned Judge. That being the case, in my opinion, even if permission were to be granted I do not see any real prospect of the Appellate Court allowing the appeal on this ground.
(b) On ground 2, again I find that the proposal put by the Claimant / Applicant that the cross-default clause ‘kills’ the HOA cannot in my opinion be decided per se without going into the facts and considering the cases put by both parties. This is because according to the Defendant,/Respondent (which is yet to be determined),the umbrella agreement can apply to other shareholdings as well. Again, this is a triable issue.
(c) On ground 3, the Claimant relied on a certain email to prove that the amount of DHR 10,000 was merely a “symbolic” figure rather than consideration. The actual amount to be paid is to be decided later. This is against the contention that each of the agreements is clear in its own terms as to the fees payable. Again, this is a dispute which has to be decided after hearing evidence adduced by both parties.
(d) On ground 4, the learned Judge has put it so well that I do not need to restate it.
(e) The last ground regards the dispute relating to the applicability of the UAE Commercial Companies law. It involves a question of public policy and whether direct transfer of nominee shareholdings to a different UAE entity is against public policy. To my mind again it involves the requirement to adduce evidence and requires a finding of facts. It being questions of illegality and public policy, to my mind also require full argument which can only be done at trial.
13. Of course, I bear in mind that I have to decide whether there are any other compelling reasons why appeal should be allowed in this case. Counsel for the Claimant suggested that the point of law relating to Re Kopel and the public policy issues relating to the foreign ownership of UAE companies are compelling reasons why permission should be given in this case. I do not consider those are reasons sufficient for permission to be given. In any case, the claim will go for full trial and those issues can be ventilated at trial. This is however not the end of the road for the Claimant. It has all the opportunities to raise and argue fully at trial.
14. The application for permission to appeal is therefore dismissed with costs. Costs if not agreed will be assessed by the Registrar.
POSTSCRIPT
1. As a postscript, I would like to say that courts should normally be slow to allow permission to appeal against an order for immediate judgment (especially when such application has been refused by the Court of First Instance) when the aggrieved party would still have a chance at trial to present his case. Sometimes, such cases will proceed to finality faster if the application for Immediate Judgment if refused.
2. This is unlike the party whose claim or defence is struck out. An order striking out a claim or defence gives finality to the case and courts should be more sympathetic and be readier to grant permission to appeal.
3. Immediate judgments are provided in the Rules to save time and costs as well as not to delay justice to the innocent party, but unfortunately some parties take advantage of such procedure to delay. This is something the court frowns on.
