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Claim No. SCT 072/2022

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

MAGENTA

Claimant

and

MAHALIA

Defendant

JUDGMENT OF H.E. JUSTICE NASSIR AL NASSER

UPON this claim being filed on 28 February 2022

AND UPON a Hearing being held before H.E. Justice Nassir Al Nasser on 14 April 2022, with the Claimant’s representative and the Defendant’s representative in attendance

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 50,000.

2. The Defendant shall also pay the Claimant the Court fees in the sum of AED 2,501.71.

Issued by:
Ayesha Bin Kalban
SCT Judge and Registrar
Date of issue: 25 April 2022
At: 10am

THE REASONS

The Parties

1. The Claimant is Magenta (hereafter “the Claimant”), a company registered in Dubai, UAE.

2. The Defendant is Mahalia (hereafter “the Defendant”), an individual who engaged the services of the Claimant to lease a property located in Dubai, UAE.

Background and the Preceding History

3. The underlying dispute arises over Agent fees to be paid by the Defendant to the Claimant pursuant to a lease brokerage agreement between the owner and broker (“the Agreement”) signed by the Claimant and the Defendant on 19 September 2021 in relation to Office Unit 001, Dubai, UAE (the “Unit”).

4. On 28 February 2022, the Claimant filed a claim against the Defendant in the DIFC Courts’ Small Claims Tribunal (the “SCT”) for payment of AED 50,000 due to the Claimant by the Defendant as Agent fees.

5. On 7 March 2022, the Defendant filed its defence.

6. A Consultation was listed before SCT Judge SCT Judge Ayman Saey on 17 and 30 March 2022, with the Claimant and the Defendant’s representative, however, the parties failed to reach a Settlement.

7. A Hearing was held before me on 14 April 2022, with the Claimant and the Defendant’s representative in attendance.

Discussion

8. The Claimant’s case is it has entered into an Agreement with the Defendant on 19 September 2021, whereby the Agreement states “at the time of signing the tenancy contract the owner/landlord agrees to pay the broker a commission amount of one month of the average annual gross rent or AED 5000 if one month is below AED 5000”.

9. The Claimant alleges that it has introduced Maik (the “Tenant”) to the Defendant (the Owner of the Unit). The Claimant has provided the tenancy contract signed by the Defendant and the Tenant whereby it sets the annual rent at the amount of AED 600,000.

10. The Claimant submits that, as detailed in the Agreement, the Defendant agreed to pay the Claimant a commission of amounting to one month of the average annual gross rent at the time of signing the tenancy contract. Therefore, in accordance with the Agreement, the Claimant seeks payment in the sum of AED 50,000.

11. In response, the Defendant submits that, prior to the signing of the Lease Agreement, the Defendant requested the Tenant’s legal documentation from the Claimant’s representative, Mr. Mohoney, with whom the Defendant was liaising the transaction. Mr. Mohoney responded to the Defendant’s request by way of a WhatsApp message dated 9 October 2021 stating that “they will be having their pre-approval by Monday for the new company name. once the lease is signed, they will get their new license and will set up a company bank account”. This is made in reference to the Tenant’s impending name change.

12. The Defendant and the Tenant signed the Tenancy Agreement on 1 November 2021 the “Tenancy Agreement”). However, the Defendant submits that the Tenant failed to provide the legal documentation that was requested to complete the tenancy, therefore, the Defendant takes the position that the Tenant cancelled the tenancy contract as she does not have the documents and permits required to establish a lease relationship. The Defendant also argues that the tenant failed to provide a stamp with the seal of the company on the tenancy contract.

13. In response, the Claimant submits that the WhatsApp conversation between the Defendant and Mr. Mohoney was made prior to signing the Tenancy Agreement. The Claimant adds that the Defendant was fully aware of the documentation required but she had signed the Tenancy Agreement at their own risk.

14. The Claimant adds that, by signing the tenancy agreement, the Defendant has an obligation to comply with the Agreement signed between the Claimant and the Defendant in accordance with the Agreement “at the time of signing the tenancy contract the owner/landlord agrees to pay the broker a commission amount of one month of the average annual gross rent or AED 5000 if one month is below AED 5000”.

15. The Claimant submits that it is the Defendant’s responsibility to make sure that she has all the documentation required prior to signing the tenancy agreement or the Defendant should have added a conditional factor.

16. The Claimant argues that it is not a party to the tenancy Agreement, and it cannot be held accountable for what happens after the lease is signed.

Findings

17. The commission in the Agreement is defined as follows:

18. There is no other condition in the Agreement which suggests that there are certain conditions to be fulfilled prior to settling the commission. The Agreement is clear as mentioned above, the Defendant did sign the Tenancy Agreement, in which she is liable to pay the Claimant the commission.

19. Although the Defendant argues that the Tenancy Agreement was cancelled by the Tenant, this does not free the Defendant from settling the commission as there were no other conditions, except that the Defendant should pay the Claimant a commission at the time of signing the Tenancy Contract.

20. Therefore, I find the Defendant liable to pay the Claimant the commission as claimed in the claim form in the sum of AED 50,000.