July 28, 2023 SCT - JUDGMENTS AND ORDERS
Claim No. SCT 187/2023
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 LEASING TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE NASSIR AL NASSER
BETWEEN
MARIANO
Claimant
and
(1) MAGEDAL LTD
(2) MAGEDRA
Defendants
| Hearing : | 20 July 2023 |
|---|---|
| Judgment : | 28 July 2023 |
JUDGMENT OF H.E. JUSTICE NASSIR AL NASSER
UPON this claim having been called for a hearing with the Claimant’s representative, the First Defendant’s representative and the Second Defendant attending the hearing
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendants shall jointly and severally pay the Claimant the sum of AED 55,280.25.
2. The First Defendant shall vacate the Unit immediately.
3. The Defendants shall jointly and severally pay the Claimant the Court fees in the sum of AED 4,120.35.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 28 July 2023
At: 12pm
THE REASONS
The Parties
1. The Claimant is Mariano (the “Claimant”), the owner of unit XYZ, DIFC, Dubai, UAE (the “Unit”).
2. The First Defendant is LTD (the “First Defendant”), a company located and registered within the DIFC, Dubai, UAE. The First Defendant signed a Lease Agreement with the Claimant for the above-mentioned Unit.
3. The Second Defendant is Magedra (the “Second Defendant”), an individual being the Guarantor and the authorised signatory of the First Defendant.
Background and the Preceding History
4. The underlying dispute arises over a lease agreement dated 6 January 2023 (the “Agreement”). As per the Agreement, the period of the lease is set out to be for three years from 1 January 2023 to 31 December 2025. The Agreement provided that the rent of the Unit for 1 year is in the sum of AED 371,164, to be paid on monthly basis in the sum of AED 32,476.85 (inclusive of VAT).
5. On 15 May 2023, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking the payment of AED 82,407 which consists of the following relief:
(a) Rental arrears in the sum of AED 82,407;
(b) Termination of the Agreement and the eviction of the First Defendant from the Unit with immediate effect;
(c) Such relief the courts consider appropriate; and
(d) All legal costs associated with filing this claim to be paid by the Defendants to the Claimant.
6. A consultation was held before SCT Judge Delvin Sumo on 22 June 2023, following which the parties failed to reach an amicable solution.
7. In line with the processes and procedures of the SCT this matter was referred to me for determination pursuant to a hearing scheduled before me on 20 July 2023 (the “Hearing”).
The Claim
8. The Claimant submits that the Defendants violated their obligations under the Agreement by non-payment of the lease amount in the sum of AED 82,407.
9. The Claimant requested termination of the Agreement in accordance with clause 30 which stipulates the following:
“Termination
30. the Landlord may terminate this lease by giving seven (7) days written notice to the tenant if:
a) any sum due under this Lease remains unpaid for thirty (30) calendar days after becoming due for payment (whether or not formally demanded);…”
10. The Claimant submits that the Defendants have been in arrears since February 2023 and have not yet settled the rent amounts. As discussed above, the Defendants are to pay the sum of AED 32,476.85 on monthly basis. Upon reviewing the statement of account in the case file and considering the period from January to July 2023, the total rent amount should be in the sum of AED 227,733.95, however, the Defendant paid as follows:
(a) On January 2023 the sum of AED 32,476.85;
(b) On 20 February 2023 the sum of AED 10,000;
(c) On 27 February 2023 the sum of AED 7,000;
(d) On 6 March 2023 the sum of AED 5,000;
(e) On 3 April 2023 the sum of AED 10,500;
(f) On 10 April 2023 the sum of AED 5,000;
(g) On 28 April 2023 the sum of AED 5,000;
(h) On 1 May 2023 the sum of AED 5,000;
(i) On 3 July 2023 the sum of AED 60,000; and
(j) On 10 July 2023 the sum of AED 32,476.85.
11. Their remaining balance is AED 55,280.25, placing the Defendants in arrears for more than 30 calendar days.
12. The Defendants submitted a statement of account provided by the Claimant (the “Statement of Account”). As per the Statement of Account, the remaining balance is AED 59,004.61. The Claimant added the court fee of these proceedings in its Statement of Account, hence, the remaining balance has been calculated to this amount.
13. At the hearing, I explained to the parties that the claim for the Court fee would be determined independently from the claim for rental arrears.
Findings
14. The relationship between the parties is governed by the Agreement along with the DIFC Leasing Law No. 1 of 2020.
15. In relation to the Defendants, I find that the Defendants shall jointly and severally pay the Claimant the remaining rental arrears in the sum of AED 55,280.25.
16. I also find the First Defendant to be in breach of the Agreement by failing to pay the rent. The Claimant is entitled to terminate the Agreement in accordance with Clause 30 of the Agreement. As the Claimant filed its claim on 15 May 2023, I shall consider the notice of the claim as formal written notice of termination of the Agreement (the “Date of Written Notice”). As the Defendants have not settled all the amounts due under the Agreement and more than one month has passed since the Date of Written Notice, I shall consider the Agreement to be terminated and the First Defendant shall evict the Unit with immediate effect.
17. In relation to the Court fees, I find the Defendants to be jointly and severally liable to pay the Claimant the Court fees in the sum of AED 4,120.35.
