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Claim No. SCT 045/2021

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 SCT JUDGE NASSIR AL NASSER

BETWEEN

LINEESH

Claimant

and

LAHARI

Defendant

JUDGMENT OF SCT JUDGE NASSIR AL NASSER

UPON this claim having been called for a hearing, the Claimant and the Defendant’s representative attended the hearing;

AND UPON reading the submissions and evidence filed and recorded on the Court file;

IT IS HEREBY ORDERED THAT:

1. The Defendant shall pay the Claimant the sum of AED 108,246.50 in relation to the rent amount and the overstay from 1 November 2020 to 31 March 2021.

2. The Defendant shall continue to pay a daily rent of AED 408.30 from 1 April 2021 to the date of official vacation of the unit.

3. The Defendant shall pay the Claimant the Court fee in the sum of AED 4,102.80.

Issued by:
Ayesha Bin Kalban
SCT Judge and Deputy Registrar
Date of issue: 4 April 2021
At: 12pm

THE REASONS

The Parties

1. The Claimant is Lineesh (herein “the Claimant”), the Landlord of Unit 00, DIFC, Dubai, UAE.

2. The Defendant is Lahari (herein “the Defendant”), the Tenant of Unit 00, DIFC, Dubai, UAE.

Background and the Preceding History

3. The underlying dispute arises over a tenancy contract entered into between the parties dated 1 October 2019 to 31 October 2020 (the “Contract”). The Contract provided that the Claimant would rent Unit 00, DIFC, Dubai, UAE (the “Unit”) for 1 year in return for AED 140,000 per year in addition to 5% VAT. The annual rent was to be paid over 4 cheques.

4. On 17 February 2021, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking the non-payment of rent and charges accumulated after the expiry and cancellation of the Contract.

5. The Defendant acknowledged the Claim via email and attended the Consultation and the Hearing.

6. The parties met for a Consultation with SCT Judge Hayley Norton on 22 March 2021 but were unable to reach a settlement.

7. A Hearing was scheduled before me on 29 March 2021, the Claimant and the Defendant’s representatives attended the hearing.

The Claim

8. The Claimant’s case is that the Defendant failed to make payment of rent for the Unit via the fourth cheque and the VAT in the sum of AED 47,000. The Claimant also claims rent from 1 November 2020 to 31 March 2021 alleging that the Defendant failed to provide a notice of non-renewal as per the Contract and failed to vacate the unit.

9. The Claimant alleges that it is entitled to the sum of AED 61,246.50 including the 5% VAT. The Claimant’s calculation was based on AED 140,000 per year + 5% VAT / 12 months = AED 12,249.30 per month x 5 months from 1 November 2020 to 31 March 2021.

10. The Claimant in his case seeks the non-payment of rent and charges accumulated after the expiry of the Contract in the sum of AED 108,246.50.

The Defence

11. The Defendant failed to file its supporting documents through the E-Registry Portal. However, at the Hearing the Defendant did not challenge the payment of the Fourth Cheque + VAT in the sum of AED 47,000.

12. In relation to the rent from the period of 1 November 2020 to 31 March 2021, the Defendant argues that during the period of 11 November 2020 it has communicated with the Claimant via WhatsApp to notify it of its intention to not seek renewal of rent.

13. In addition, the Defendant argues that it has provided the Claimant with access to the Unit and submits that it has not used the Unit post the expiry of the tenancy period set out in the Contract.

Discussion

14. The relationship between the parties is governed by the Contract along with the DIFC Leasing Law No. 1 of 2020 (“DIFC Leasing Law”).

15. In relation to the payment of the rent set out in the Contract, the Defendant is under an obligation to pay the rent amount in the sum of AED 140,000 + 5% VAT by way of four cheques.

16. The Defendant failed to make the payments on time, but made payment on different times as follows:

17. The remaining balance of the rent as per the Contract is AED 47,000.

18. Therefore, in relation to the sum due as per the Contract, I find that the Defendant is liable to pay the Claimant the sum of AED 47,000.

19. In relation to the Claimant’s claim for the rent from the period of 1 November 2020 to 31 March 2021 in the sum of AED 61,246.50 the Contract states the following:

“renewal of tenancy contract is the responsibility of both parties and any amendments should be notified 60 days before expiration by writing. If neither party gives such notice, the contract will be deemed to be renewed and with the same terms and conditions”.

20. The Defendant failed to provide the Claimant with a 60-day notice of non-renewal but did inform the Defendant via WhatsApp of its intention to not seek a renewal of the Contract.

21. The Contract also states as follows:

“if Tenancy Contract renewal is not required, Tenant should give 2 months written notice prior to the end of the term. In the event that a written notice is not received 2 months prior to the expiry of the contract and the tenant vacates the property, the tenant will forfeit the security deposit. The landlord can only discontinue this tenancy contract in situation permissible under applicable laws at the DIFC.”

22. In addition to the above, the Contract also states:

“if the tenant fails to vacate the premises on expiry date of this contract or its termination, he should pay the rent for the period of overstay plus a compensation of 25% of the rent amount for that period unless the extension has been agreed otherwise.

23. The Defendant failed to vacate the Unit to date, although it argues that it has provided the Claimant with access to the Unit, but it has not officially vacated and handed over the unit. The Defendant also argues that it requested to move its furniture, but the Claimant refused based on the reason that the Defendant failed to pay the remaining amount of the rent.

24. I consider the Defendant to be in breach of the Contract by failing to pay the rent amount, failing to provide the Claimant with a 60-day notice and by not officially vacating the unit.

25. The Claimant, upon filing the claim, has not claimed the security deposit or a 25% compensation for the overstay period as per the Contract, and only claimed the overstay charges from 1 November 2020 to 31 March 2021. Therefore, I shall consider the terms of the Contract to calculate the overstay amount.

26. The annual rent was AED 140,000 + 5% VAT/12 months= 11,666 + 583.3 VAT = 12,249.3 x 5 months = AED 61,246.50.

27. I also find that the Defendant shall continue to pay a daily rent of AED 408.30 until the officially handover and vacation date.

Conclusion

28. In conclusion, I find that the Defendant shall pay the Claimant the sum of AED 108,246.50 in relation to the rent amount and the overstay from 1 November 2020 to 31 March 2021.

29. I also find that the Defendant shall continue to pay a daily rent of AED 408.3 from 1 April 2021 to the date of official vacation of the unit.

30. The Defendant shall pay the Claimant the court fees in the sum of AED 4,102.80.

Issued by:
Ayesha Bin Kalban
SCT Judge and Deputy Registrar
Date of issue: 4 April 2021
At: 12pm