December 11, 2023 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 266/2023
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
MUDRO
Claimant/Appellant
and
MABAN
Defendant/Respondent
ORDER WITH REASONS OF JUSTICE RENE LE MIERE
UPON reviewing the Judgment of H.E. Justice Nassir Al Nasser dated 2 November 2023 (the “Judgment”)
AND UPON reviewing the Claimant’s Appeal Notices dated 15 November 2023, and amended on 20 November 2023, seeking permission to appeal the Judgment (the “Application”)
AND UPON reading the submissions and evidence filed and recorded on the Court file
AND UPON a hearing having been held before me, Justice Rene Le Miere, on 28 November 2023, with the Appellant’s representative in attendance and the Respondent in attendance
IT IS HEREBY ORDERED THAT:
1. The Application is dismissed.
2. The Appellant shall each bear its own cost of the Application.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of Issue: 11 December 2023
At: 1pm
SCHEDULE OF REASONS
Summary
1. The Claimant and the Defendant executed a tenancy contract dated 29 Aril 2021 by which the Defendant granted the Claimant a tenancy for a retail shop in the DIFC from 1 May 2021 to 31 May 2022.
2. The tenancy continued to June 2022, by which time the Claimant was in arrears in rent payment.
3. There were discussions between the Claimant and the Defendant about the Defendant renewing the tenancy or granting a new tenancy to a new tenant introduced by the Claimant.
4. The Claimant says that the Defendant agreed to renew the tenancy if the Claimant paid the amount of AED 213,500 which the Defendant said was the outstanding amount owing by the Claimant.
5. The Claimant says he paid AED 200,000 by transfer to the Defendant’s bank account and asked the Defendant to apply the security deposit to meet the balance of the amount claimed by the Defendant.
6. The Defendant denies she agreed to renew the tenancy because the Claimant did not pay the AED 213,500 amount she demanded.
7. The Claimant commenced this claim in the Small Claims Tribunal. The principal claim is for an order that the Defendant renew the tenancy. The Claimant also claimed damages for losses as a result of losing his trading licence because the Defendant did not execute a new tenancy agreement.
8. The Defendant opposed the claim. She asserts there was no new agreement because the Claimant did not pay the AED 213,500 she demanded. The Defendant counterclaimed for outstanding rent because the Claimant has continued to occupy the shop premises.
9. After a virtual hearing, His Excellency Justice Nassir Al Nasser dismissed the Claimant’s claim and allowed the Defendant’s counterclaim in the amount of AED 77,552, ordered the Claimant to vacate the premises immediately and to pay the Defendant overstay rent at the daily rate of AED 460.27 which shall accrue from 5 October 2023 to the date of vacating the premises.
10. The Claimant now seeks permission to appeal from that decision.
11. For the reasons which follow I find that the appeal would not have a real prospect of success and there is no other compelling reason why the appeal should be heard. Therefore, permission to appeal is refused.
Hearings before Small Claims Tribunal
12. The Claim Form was filed by Medrig as attorney for the Claimant pursuant to a power of attorney. Medrigwas familiar with the dealings between the Claimant and the Defendant and had participated in some of the communications between them.
13. The Claimant’s representative, Medrig, and the Defendant appeared before H.E. Justice Nassir Al Nasser on 2 October 2023 and again on 19 October 2023. Each party referred to the documents filed with the Court and argued their case to the Tribunal.
14. The documents filed with the Court show the following events and circumstances.
15. A term of the executed Tenancy Contract is:
“Renewal of Tenancy is at the discretion of the Landlord. If the Tenant does not renew the Tenancy on Expiry date he will have to pay the rent as demanded.”
16. A further term of the agreement was that the Claimant pay a security deposit of AED 12,500 to be refunded at final inspection at the end of the contract.
17. The tenant undertook not to transfer the tenancy to anyone else.
18. The rent was to be paid by 6 cheques. The Claimant failed to do so.
19. When the initial tenancy expired in 2022, the Claimant and Defendant agreed to renew the tenancy for another year at an increased rent.
20. As the tenancy expiry date approached the Claimant was in rent arrears. There were discussions between the Claimant, the Defendant and a proposed new tenant about the Claimant renewing the tenancy or the proposed new tenant taking over the tenancy. The Defendant said in effect the Claimant had to clear the arrears.
21. There are some text messages without dates, but the following can be discerned from the documents.
22. The Defendant sent a text message to the Claimant. The message included a photograph of a note dated 15 May 2023 in which Defendant said that the amount outstanding was AED 213,500 and asked the Claimant to pay that amount. The Claimant replied to the effect that that included June. The Defendant responded in effect that the Claimant could pay or not pay the amount, but the Defendant would not sign the papers if the Claimant did not pay that amount.
23. On 3 July and again on 4 July Mirkit, on behalf of the Claimant, transferred AED 100,000 to the Defendant’s Bank account, a total of AED 200,000.
24. On 5 July the Defendant exchanged messages with a representative of the proposed new tenant, Mikni. The Defendant said that the Claimant had not paid AED 13,500 and said in effect that before signing a new contract they needed to pay that outstanding amount. Mikni responded that the old payment would be cleared by the old tenant, not the new tenant.
25. On a date that is not clear, Mubri, acting on behalf of the Claimant transferred AED 80,000 to the Defendant. The Defendant returned the amount to Mubri because she said she did not know who they were. The Claimant does not dispute that the Defendant returned the payment but says the Defendant did know who they were.
26. The Defendant counterclaimed for AED 121,086.25, which she claimed was the amount owing to her for unpaid rent and outgoings because the Claimant has continued to occupy the shop premises without paying rent.
The application for permission to appeal
27. The Claimant’s appeal notice says in effect that the judgment appealed from did not consider that on 30 June 2023 the Defendant wrote to the Claimant saying that she would give the Claimant a new tenancy contract after the Claimant cleared the outstanding payment of AED 213,500, that the Claimant cleared that amount on 3 and 4 July and the Defendant has been asking for more payments since then. The Claimant refers to the AED 80,000 sent to the Defendant by the broker and returned by the Defendant. The Claimant refers to losses suffered by the Claimant as a result of the Defendant refusing to renew the tenancy.
The Judgment of the Tribunal
28. In his reasons, His Excellency Justice Nassir Al Nasser summarised the underlying dispute and the history of the proceeding.
29. His Excellency accurately summarised the claim:
“[10] The Claimant submits that prior to renewal, the Defendant provided the Claimant with a handwritten document of the outstanding rental arrears and requested that the arrears be settled in order to renew the tenancy. As per the Defendant’s calculations, the Claimant was due to pay the Defendant rental arrears in the sum of AED 213,500 (the “Rental Arrears”).
…
[15] The Claimant submits that it has already paid AED 200,000 with regards to the Rental Arrears. The Claimant further submits that, as Defendant holds a security deposit of AED 12,500, therefore, the only sum remaining to be paid is AED 1,000.”
30. His Excellency considered the Claimant’s submission and referred to: the Defendant’s request to the Claimant to pay the rental arrears of AED 213,500 and the Claimant’s argument that this sum has been settled because he has paid AED 200,000 and the Defendant has in her possession the security deposit of AED 12,500 and “Therefore, the balance is only in the sum of AED 1,000”. His Excellency referred to the broker having transferred AED 80,000 to the Defendant, but said that, the Defendant decided to refund this amount, alleging that she did not know where this money was coming from, although the Claimant submits that she was aware of the broker.
31. His Excellency stated his finding:
“[27] Having reviewed all of the evidence, I find that there were ongoing negotiations to renew the Agreement, however, the parties did not agree upon a renewal. In addition, the Defendant’s agreement to renew was subject to the Claimant paying the Rental Arrears. The Defendant claimed that the Claimant should pay the sum of AED 232,000 including a court fee, however, this court fee is in relation to a different matter. The Claimant only paid the sum of AED 218,500, leaving the remaining balance of AED 13,500. Of this remaining balance, the Claimant requested the Defendant to deduct AED 12,500 from the security deposit leaving only the sum of AED 1,000 to be paid. I find that if this amount were to be deducted from the security deposit, then the Claimant should have paid a new security deposit for the renewal.”
32. His Excellency then stated his conclusion:
“[31] I find the Claimant is in breach of its obligations to pay the rent in six cheques. The Claimant has failed to settle the payments on time. In addition, from the remaining sum of AED 13,500 as payment for Rental Arrears, even if the Defendant complied with the Claimant’s request to deduct this sum from the security deposit, there would still be an outstanding amount of AED 1,000 to be paid. [32] Therefore, the Claimant’s claim shall be dismissed.”
33. His Excellency then assessed the outstanding rent owing by the Claimant for overstay rent because the Claimant had continued to occupy the premises.
Appeal principles
34. To appeal a tribunal decision, an appellant must first obtain permission to appeal. This application is made to the CFI. Permission to appeal may be given only where the Court considers that the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard1.
35. The Court will allow an appeal where the decision was wrong, unjust because of a serious procedural or other irregularity in the proceedings, or wrong in relation to any other matter provided for or under any law2.
36. In this case the Claimant says that the decision was wrong in that the judgment did not consider the primary facts which the Claimant says gave rise to an agreement to renew the tenancy.
37. The judgment considered, and expressly referred to, the primary facts referred to by the Claimant. The Claimant’s real complaint is that the Tribunal did not conclude from those primary facts that the Defendant had agreed to renew the tenancy.
38. To succeed in an appeal on factual grounds an appellant must demonstrate that the judge made an error in his assessment of the evidence and this error significantly affected the outcome of the case.
Assessment
39. The Claimant claims that the Defendant’s refusal to renew the tenancy caused him to lose his trading licence and to suffer loss for which he claimed damages. However, the central issue is whether the Defendant and the Claimant agreed to renew the tenancy. The Claimant must establish that if permission is granted, he would have a real prospect of succeeding on appeal that the Defendant agreed to grant a new tenancy and is bound to grant the renewed tenancy.
40. The Claimant, by his representative, referred to the same documents at the hearing of the Claimant’s application for permission to appeal as he had referred to at the hearings in the Tribunal.
41. At the hearing of the application for permission to appeal the Claimant’s representative confirmed that the Claimant agreed with the findings of the Tribunal that:
(a) the Defendant requested the Claimant to pay the rental arrears of AED 213,500;
(b) the Claimant paid and the Defendant accepted AED 200,000;
(c) the broker transferred AED 80,000 to the Defendant, but the Defendant refunded the amount alleging she did not know where the money was coming from;
(d) of the balance of AED 13,500, the Claimant requested the Defendant to deduct AED 12,500 from the security deposit; and
(e) if the Defendant agreed to deduct AED 12,500 from the security deposit that would leave a balance of AED 1,000.
42. Those facts sustain the judgment in favour of the Defendant. The Defendant agreed to renew the lease only upon full payment of the rent arrears of AED 213,500. The Claimant failed to fulfil this condition.
43. It is not clear when the broker transferred the amount of AED 80,000 to the Defendant’s account. The transfer was not from the Claimant and did not state that it was from the Claimant. The Defendant did not accept the transfer as a payment by the Claimant on account of the rent arrears or future rent. She was under no obligation to do so.
44. Therefore, the payment to the Defendant on account of the arrears was AED 200,000.
45. The Claimant asked the Defendant to apply the security deposit of AED 12,000 to the balance. The Defendant did not agree to do so. She was not obliged to do so. As the Tribunal observed, if this amount were to be deducted from the security deposit, then the Claimant should have paid a new security deposit for the renewal. Otherwise, the Defendant would have no security deposit for the renewed tenancy. The Defendant did not agree to that.
46. Even if the Defendant had agreed to accept the security deposit in part payment, that still left a balance of AED 1,000. The failure to pay AED 1,000 may seem insignificant compared to the total sum, but it is a deviation from the agreed upon terms. The Defendant was not obliged to accept the amount demanded less AED 1,000 and she did not do so.
47. The Claimant's failure to fulfil the condition for the renewal of the tenancy means there was no agreement to renew the tenancy.
48. The Claimant has not demonstrated that the Tribunal Judge made a clear error in his assessment of the evidence and this error significantly affected the outcome of the case. To the contrary, the Tribunal’s decision follows from the facts which the Claimant did not contest.
49. The appeal would have no real prospect of success. There is no other compelling reason the appeal should be heard.
50. The application for permission to appeal will be dismissed.
