July 14, 2022 SCT - JUDGMENTS AND ORDERS
Claim No. SCT 167/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE NASSIR AL NASSER
BETWEEN
LAELA
Claimant
and
LAPRONDA
Defendant
| Hearing : | 6 July 2022 |
|---|---|
| Judgment : | 14 July 2022 |
JUDGMENT OF H.E. JUSTICE NASSIR AL NASSER
UPON this Claim being filed on 24 May 2022
AND UPON the Claimant amending the Claim Form on 6 July 2022 to remove the Second Defendant Mr. Makki Helal
AND UPON the Defendant’s failure to file an Acknowledgment of Service
AND UPON a hearing having been listed before H.E Justice Nassir Al Nasser on 6 July 2022, with the Claimant in attendance and the Defendant being absent although served with notice of the Claim
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay to the Claimant overstay charges in the amount of AED 38,739.72.
2. The Defendant shall pay the Claimant the sum of AED 9,685 being 25% of the amount of the overstay charges.
3. The Defendant shall pay the sum of AED 3,395.40 being towards DEWA and district cooling.
4. The Defendant shall vacate the Premises immediately.
5. The Defendant shall pay the Claimant the amount of AED 2,592.78, being the filing fee paid by the Claimant for the filing of this Claim.
Issued by:
Ayesha Bin Kalban
SCT Judge and Registrar
Date of issue: 14 July 2022
At: 8am
THE REASONS
The Parties
1. The Claimant is Laela (the “Claimant”), the Landlord of Unit 001 DIFC(the “Premises”).
2. The Defendant is Lapronda, a holiday home company located in the DIFC (the “Defendant”).
Background, the Preceding History and Claim
3. On 22 December 2020, the Claimant and Defendant entered into an agreement to lease the Claimant’s Premises for one year (the “Lease Agreement”), starting 27 December 2020 to 26 December 2021 for an annual rent of AED 70,000 paid in 4 cheques, plus a conditional free rent period from 27 December 2021 to 26 January 2022 on the condition that the Defendant would not breach the Lease Agreement. The Lease Agreement plus the one-month free period expired on 26 January 2022, however, the Defendant continued occupying the Premises without entering to a new Lease Agreement or paying the rent.
4. On 24 May 2022, the Claimant filed a Claim Form, seeking an order that the Defendant pay the total amount of AED 51,820.12 plus 10% legal Interest from its due date until full payment of the amount as per Clause (12) of First Lease Agreement, as follows:
(a) AED 38,739.72 in respect of the pending rent amount from 27 December 2021 until 17 July 2022, plus any upcoming amount until the date of actual evacuation;
(b) AED 9,685 as 25% of rent value for overstay period from 27 December 2021 until 17 July 2022 as compensation pursuant to Clause 14 of the Lease Agreement. This amount shall accrue until the date of actual evacuation; and
(c) The Defendant to clear the amount of AED 3,395.40 for outstanding charges towards DEWA, District Cooling and any other service charges until the date of evacuation.
5. The Claimant also sought an order for the following terms:
(a) The Defendant to pay all costs for the maintenance of the Premises and the rectification of any damages to the Premises, the amount of which will be determined upon handing over the Premises.
(b) The Defendant to pay all legal costs associated with the filing of this Claim.
6. The Claimant and Defendant met for a Consultation with SCT Judge Hayley Norton on 22 June 2022 but were unable to reach a settlement.
7. On 6 July 2022, the Claimant Amended the Claim from and removed the Second Defendant.
8. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a Hearing held on 6 July 2022, with the Claimant in attendance. The Defendant was absent although served with notice of the Claim.
9. RDC 53.61 of the Rules of the DIFC Courts stipulates that “if a defendant does not attend the hearing and the claimant does attend the hearing, the SCT may decide the claim on basis of the evidence of the Claimant only”.
Discussion
10. First and foremost, the relevant Lease Agreements are in relation to a unit in the DIFC, therefore by default, any agreement shall be governed by the prevailing law of the DIFC, United Arab Emirates and that upon failure to resolve any disputes connected to the Lease Agreements, the dispute shall be referred to the DIFC Courts. Therefore, it is clear and undisputed that the DIFC Courts have jurisdiction to decide this matter. As the claim value is less than AED 500,000, this claim is properly before the SCT.
11. The Claimant claims the total sum of AED 51,820.12 plus 10% legal interest from due date till the full clearance of amount as per clause 12 of the Lease Agreement. Clause 12 reads as follows:
“12. without prejudice to the rights and remedies of the Landlord under this Tenancy Contract or under applicable law if the Tenant fails to make any payments to the landlord of the rent or any sums whatsoever due to the Landlord under this Tenancy at the time or times or within the periods specified in this tenancy contract, the Landlord may charge the Tenant a penalty thereon in addition to the owed amount calculated at a rate of ten percent (10%) per annuum on which the payment is due in accordance with this tenancy contract until the date of full payment as mutual agreed compensation.”
12. Clause 12 of the Lease Agreement provides that the 10% per annum applies in cases where the Defendant fails to pay the rent or any sum due under this Lease Agreement at the time or times or within the period specified in the Lease Agreement. However, I find that the Lease Agreement expired on 26 December 2021 without being renewed, and therefore I find that the Defendant has overstayed. I am of the view that the 10% interest per annum shall not apply under these circumstances. In addition, the Claimant failed to factor in the 10% interest rate to the claim value sought in the Claim Form.
13. The Claimant submits that the Defendant is overstaying in the Premises from 27 December 2021 to date without making any payment toward the rent, as such, I find that the Defendant is liable to pay the amount of AED 38,739.72, against the rent amount for the overstay.
14. The Claimant drew the Courts’ attention to paragraph 2 of clause 14 of the Lease Agreement, which reads as follows:
“14. If the Tenant fails to vacate the premises on expiry date of this Contract or its termination, the tenant should pay the rent for the period of overstay plus a penalty equal to 25% of the rent amount for that period.”
15. In review of Clause 14, the Court finds that the Defendant shall pay the Claimant the sum of AED 9,685 which is 25% of the amount of the overstay charges of AED 38,739.72 and the percentage shall continue to accrue until the date of evacuation.
Dewa and District cooling bills
16. The Claimant also claimed the sum of AED 3,395.40 towards DEWA and the district cooling. The Claimant has provided the DEWA receipt which reflects the amount claimed by the Claimant.
17. The Claimant also seeks to recover the fee that was paid to the Court for the filing of this Claim. I am of the view that, the Claimant has been successful on its claims and is therefore entitled to recover the fee that it paid in respect of the filing of this Claim.
Conclusion
18. In light of the aforementioned, I find that the Defendant is liable to pay the overstay amount in the amount of AED 38,739.72.
19. The Defendant shall pay the Claimant the sum of AED 9,685 being 25% of the amount of the overstay charges.
20. The Defendant shall pay the sum of AED 3,395.40 towards DEWA and district cooling.
21. The Defendant shall vacate the Premises immediately.
22. The Defendant shall pay the Claimant the amount of AED 2,592.78, being the filing fee applicable for the filing of this Claim.
