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Claim No. SCT 380/2023

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 SCT JUDGE AND REGISTRAR AYESHA BIN KALBAN

BETWEEN

MIKHRU

Claimant

and

MIMBA

Defendant

JUDGMENT OF SCT JUDGE AND REGISTRAR AYESHA BIN KALBAN

UPON this Claim being filed on 2 October 2023

AND UPON a hearing having been listed before SCT Judge and Registrar Ayesha Bin Kalban on 23 November 2023, with the Claimant 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 411.60.

2. The Defendant shall pay the Claimant the further amount of AED 5,843.25 in regards to the Empower Demand Charges in the event that the Claimant has settled this amount with Empower. Should this payment to Empower remain outstanding, the Defendant shall settle the payment of this amount with Empower.

3. The Defendant shall pay the Claimant a portion of the Court fee in the sum of AED 367.50.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 12 December 2023
At: 3pm

THE REASONS

The Parties

1. The Claimant is Mikhru (the “Claimant”), an individual who previously leased a property belonging to the Defendant.

2. The Defendant is Mimba (the “Defendant”), a landlord of a unit in DIFC, Dubai (the “Unit”).

Background and the Preceding History

3. The underlying dispute arises over the Claimant’s early termination of a lease agreement entered into by the parties on 16 March 2023. The Claimant was a tenant in the Unit from March 2019 until his request for early termination of the lease entered into in March 2023 (the “Lease Agreement”). This request was made by way of email to the Defendant on 14 August 2023, with the Claimant seeking to vacate the Unit by 15 September 2023.

4. On 2 October 2023, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming various sums set out as follows:

5. The parties then met for a Consultation with SCT Judge Hayley Norton on 16 October 2023 but were unable to reach a settlement. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a Hearing held on 23 November 2023.

The Issues

6. This dispute is governed by the DIFC Leasing Law No. 1 of 2020 (the “DIFC Leasing Law”) and the Real Property Law DIFC Law No. 10 of 2018 (the “Real Property Law”) in conjunction with the relevant Lease Agreement.

7. The Claimant makes the Claims set out in paragraph 4 above. I have identified these to be issues that I must determine following an analysis of the Defendant’s defence.

Is the Claimant entitled to a reimbursement of the DIFC registration fee?

8. The Claimant submits that, in the year 2019, the Claimant paid the amount of AED 367.50 to the DIFC in order to register the Lease Agreement, in his urgency to move into the Unit. He submits that this should have been paid by the Defendant, and submits proof in the form of a receipt confirming his payment of this amount.

9. The Defendant’s response to this Claim was to request proof evidencing payment, which was already provided by the Claimant as part of his Claim Form and supporting documents.

10. I take the view that the registration of the Lease falls within the obligations of the Defendant being the Landlord of the Unit. This is in accordance with Article 49(1) of the DIFC Real Property Law which reads as follows:

11. Given that the Real Property Law places the obligation upon the Lessor, i.e. in this case, the Defendant, to register a lease, it is evident that any action or payment that is required to be completed in order to complete the registration requirements must fall upon the Lessor/the Defendant. In absence of any proof from the Defendant evidencing payment of this amount, I take the view that the Claimant must be reimbursed for this payment.

12. I therefore conclude that the Claimant’s claim for a reimbursement of the registration fee paid by the Claimant to the DIFC must be allowed and the Defendant shall pay the Claimant the amount of AED 367.50.

Is the Claimant entitled to the reimbursement of amounts paid to Empower?

13. This issue is two-fold, seeing as the Claimant has made claims surrounding two payments made to Empower, being the cooling plant that provides services to facilities in the DIFC. The first claim that the Claimant seeks payment for is a charge of AED 44.10 issued by Empower against the Unit, pursuant to an invoice dated 28 February 2019 (the “First Empower Claim”). The Claimant submits that he had only commenced tenancy in the Unit by March 2019, and the charge at hand represents meter maintenance that the Claimant should not be liable for. The Claimant, at the time, had made payment, but now seeks reimbursement for that sum.

14. The Defendant, in response to the First Empower Claim, states that, in accordance with the Lease Agreement, all utility payments, including empower charges, are to be paid by the tenant, being the Claimant.

15. This charge appears to be a maintenance amount for metering services that was imposed prior to the Claimant occupying the Unit, and it cannot be concluded that the Claimant be liable for any charges that were imposed before his occupancy. I therefore find that the Claimant must be reimbursed for such amount.

16. I turn to the second claim, being a claim for the amount of AED 9,738.25 representing demand charges and metering fees incurring from the year 2020 until the date of the termination of the Lease. The Claimant, in his Claim, submits that the amount that the Defendant should be liable to pay is from 2021 until the date of termination, and represents fixed charges that do not relate to the Claimant’s consumption of power during his occupancy of the Unit. The amount set out in the Claim Form is AED 5,843.25 (the “Second Empower Charge”).

17. The Defendant submits that the Claimant is liable for all charges relating to Empower, and repeats its reliance on the Lease Agreement.

18. The DIFC Leasing Law states at Article 33 that:

19. The Court takes the view that the Empower Demand Charges represent capacity charges that recur on a yearly basis as a service charge to ensure the provision of cooling services to the Unit. This falls under the obligation of the Defendant to settle, in accordance with the abovementioned article of the DIFC Leasing Law.

20. The Claimant’s claim does not clearly state whether this amount has been paid by the Claimant to Empower as part of the clearance process. If the Claimant has indeed made this payment, the Claimant should be entitled to a reimbursement. If the Claimant has not made this payment, the Defendant is to settle this amount with Empower directly.

21. I therefore find in favour of the Claimant on payments surrounding Empower charges, both in the amount of AED 44.10 and the amount of AED 5,843.25.

Is the Claimant entitled to a reimbursement of the deduction made by the Defendant in respect of the DIFC termination fee?

22. The Claimant submits that, upon the Defendant’s refund of the rent amount paid by the Claimant in respect of the Lease Agreement, the Defendant’s deduction of the amount of AED 367.50 should not have been paid without the Claimant’s prior consent.

23. The Defendant’s submission in response to this claim is that the early termination of the Lease Agreement occurred due to the Claimant’s request. It is therefore upon the Claimant to bear the charges for the termination subjected by the DIFC.

24. The parties have provided evidence that this matter was subject to a discussion where the Claimant was of the view that no amounts should be deducted from the rental refund, other than the penalty amount. The Claimant relies on the fact that there is no provision under any law surrounding this issue, and that Clause 7 of the Lease Agreement sets out that only the penalty amount, equivalent to two months’ rent, would be the authorised deduction. The Claimant takes the view that such a deduction must be agreed by the parties before it is implemented.

25. While the Claimant is correct in his submission that both the Leasing Law and the Real Property Law are silent on who bears the charges of registering and terminating the lease, any reasonable mind would conclude that given that in the DIFC lease agreements end upon the expiry of the lease term, any party that requests an earlier termination should bear all charges for that request. This includes the termination fee imposed by the DIFC. While ideally the parties should have sought to agree this amount, I have had sight of a discussion between the parties in the form of email correspondence dated 18 September 2023 where it is clear that no agreement was to be reached in this regard, and no harm was inflicted to the Claimant as a result of this deduction.

26. It follows that the Claimant’s claim for the reimbursement of the amount of AED 367.50 that was deducted by the Defendant from the rental refund be dismissed henceforth.

Conclusion

27. In light of the aforementioned, I find that the Defendant shall pay the Claimant the sum of AED 411.60. Should the Claimant have made payment of the amount of AED 5,843.25 to Empower in settlement of the demand charges, the Defendant shall reimburse the Claimant for this amount, following the provision of evidence from the Claimant demonstrating payment. If the Claimant has not paid, the Defendant shall clear this charge with Empower as necessary.

28. The Defendant shall pay the Claimant the fee to be paid to the Court, in the amount of AED 367.50.