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Claim No: SCT 205/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

NAATHIM

Claimant/ Applicant/Respondent

and

(1) NABEEL

Defendant/Respondent

(2) NASRULLAH

Defendant/Applicant/Respondent

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ORDER WITH REASONS OF JUSTICE RENE LE MIERE

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UPON the judgment of SCT Judge H.E. Justice Maha Al Mheiri (the “Judge”) dated 6 September 2024 (the “Judgment”)

AND UPON the Claimant’s Appeal Notice dated 11 September 2024 seeking permission to appeal the Judgment (the “Claimant’s PTA Application”)

AND UPON the Second Defendant’s Appeal Notice dated 18 September 2024 seeking permission to appeal the Judgment (the “First Defendant’s PTA Application”)

AND UPON considering the documents and submissions filed by both parties and recorded on the case file

AND UPON hearing and considering the oral submissions of the Defendant/Applicant and the Claimant/Respondent made at a hearing held on 3 October 2024 (the “Application Hearing”)

IT IS HEREBY ORDERED THAT:

1. The Claimant will be granted permission to appeal against the Judgment that she pay the Second Defendant the amount of AED 18,750 and the DIFC Courts’ filing fee in the amount of AED 937.50.

2. The Claimant’s PTA Application for permission to appeal against the Judgment dismissing her claims is dismissed.

3. The Second Defendant’s PTA Application is dismissed.

4. The parties will bear their own costs.

Issued by:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of Issue: 16 October 2024
At: 8am

SCHEDULE OF REASONS

Summary

1. The Claimant is Naathim.

2. The First Defendant is Nabeel, the previous employer of the Claimant.

3. The Second Defendant is Nasrullah, a property company licensed in Dubai, UAE.

4. The Claimant, on behalf of Nadid, and Ms Naazirah, on behalf of the Second Defendant, signed an agreement, described as “Licence to Occupy”, permitting Nadid to operate a coffee shop from premises in onshore Dubai. I will refer to the agreement as the Licence Agreement.

5. The Claimant cancelled the Licence Agreement.

6. The Claimant brought a claim in the Small Claims Tribunal (“SCT”) against the First and Second Defendants for the refund of the amounts of AED 10,000 and AED 75,000 respectively, which the Claimant claimed she had paid to them as deposits for the rent of the premises.

7. The Second Defendant counterclaimed for the Claimant to pay it AED 75,000 for an advance licence fee due under the Licence Agreement.

8. After a hearing, H.E. Justice Maha Al Mheiri (the “Judge”) dismissed the Claimant's claims and ordered the Claimant to pay the Second Defendant the amount of AED 18,750 equivalent to three months of the rental value for early termination and the court fee in the amount of AED 937.50 (the “Judgment”).

9. The Claimant now seeks permission to appeal against the whole of the Judgement.

10. The Second Defendant seeks permission to appeal from the Judgment and claims the amount of AED 75,000 for the licence fee due under the Licence Agreement.

11. For the reasons which follow:

Background

12. The First Defendant rented premises from the Second Defendant for his restaurant located in onshore Dubai.

13. The First Defendant hired the Claimant as an employee.

14. The Claimant wanted premises on which to operate her own business. The First Defendant introduced the Claimant to the Second Defendant.

15. The Claimant obtained the registration of a business under the name "Nadid " and a trade license for that company.

16. The Claimant, on behalf of Nadid, and Ms Naazirah, on behalf of the Second Defendant, signed a license agreement permitting Nadid to operate a coffee shop from premises in onshore Dubai

17. The Second Defendant produced a Licence to Occupy consisting of 14 pages including schedules. The agreement provides that the Licensee shall pay in advance to the Licensor the licence fee which is stated in the schedule to be the amount of AED 75,000.

18. The Claimant says she signed only a six page document which did not provide that the Licensee was to pay in advance a licence fee of AED 75,000.

19. The Claimant claims that on 19 February 2024 at the Second Defendant’s offices in the presence of the First Defendant, she gave AED 75,000 in cash to Ms Naazirah for the rent of the premises to be occupied by the coffee shop.

20. The Claimant claims she paid the First Defendant AED 10,000.

21. The Second Defendant denies that the Claimant gave AED 75,000 or any amount to Ms Naazirah on behalf of the Second Defendant.

22. The First Defendant denies the Claimant paid him AED 10,000 or any amount.

23. There was a lot of correspondence in relation to the Licence Agreement which resulted in the Claimant requesting that the agreement be cancelled, and she be refunded the amount of AED 75,000.

Small Claims Tribunal claims

24. On 20 May 2024, the Claimant filed a claim in the SCT against the Defendants seeking that the First Defendant refund her the amount of AED 10,000 and the Second Defendant refund her the amount of AED 75,000 for rent paid.

25. The First Defendant filed an Acknowledgment of Service intending to defend the whole claim.

26. The Second Defendant filed an Acknowledgment of Service intending to defend the whole claim and a counterclaim requesting that the Claimant pay the Second Defendant the amount of AED 75,000 for the licence fee in advance.

27. There was a hearing before H.E. Justice Maha Al Mheiri on 4 July 2024 (the “Hearing”). The Claimant and the First Defendant appeared and represented themselves. Ms Naazirah appeared and represented the Second Defendant.

Judge’s findings

28. During the Hearing, the First Defendant submitted that the Claimant had failed to pay an amount he loaned to her. The First Defendant had not filed a counterclaim. Therefore, the Judge did not consider any claim by the First Defendant.

29. The Judge held that there was no disagreement between the parties in relation to the validity of the Licence Agreement, which Her Excellency referred to as the Tenancy Agreement. Her Excellency held that in essence, the disagreement between the parties pertained to whether the rent amount was paid by the Claimant or not.

30. The Judge held that there was no evidence given by the Claimant to prove that the amount of AED 75,000 was paid to the Second Defendant in the presence of the First Defendant. Her Excellency said:

31. Accordingly, the Judge dismissed the Claimant’s claim against the Second Defendant for the refund of the amount of AED 75,000.

32. The Judge upheld the Second Defendant’s counterclaim and held that the Claimant should pay the Second Defendant the amount of AED 18,750 equivalent to three months of the rental value for early termination and the court fee in the amount of AED 937.50.

33. The Judge found that the Claimant had not paid AED 10,000 to the First Defendant and dismissed the Claimant’s claim against the First Defendant.

The applications for permission to appeal

34. The Claimant seeks permission to appeal against the Judgment. The Claimant says:

35. The Defendants opposed the Claimant’s PTA Application.

36. The Second Defendant applied for permission to appeal on the ground that the Second Defendant was entitled to the full amount of AED 75,000 for the licence fee in advance under the Licence Agreement.

37. No order was made for or against the First Defendant in the proceeding in the SCT. He has not sought permission to appeal against the Judgment. He appeared at the hearing of the appeal but played no active part in the appeal.

The Claimant’s appeal

38. On her PTA Application, the Claimant’s principal submission was that she paid AED 10,000 and AED 75,000 to the First and Second Defendants respectively, the Judge was wrong to find that she did not, and she is entitled to be refunded those amounts by the First and Second Defendants respectively.

39. The court will give permission to appeal 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 heard.

40. The court will allow an appeal where the decision was wrong, or unjust because of a serious procedural or other irregularity in the proceedings or wrong in relation to any other matter provided for under any law.

41. The Claimant’s case is that the Judge was wrong in finding that she did not pay AED 10,000 and AED 75,000 to the First Defendant and Ms Naazirah on behalf of the Second Defendant respectively.

42. The Claimant submitted that two witnesses had given evidence that they witnessed the payments. The First Defendant and Ms Naazirah submitted that the Claimant was referring to other court proceedings in the Dubai courts. I am satisfied that the Judge was right in stating that there was no evidence to prove that the Claimant paid the amounts she claimed to have paid, other than her own statement that she did. That statement was contradicted by the First Defendant and Ms Naazirah.

43. The Judge’s finding that the Claimant did not pay AED 10,000 and AED 75,000 to the First and Second Defendants respectively is a finding of fact based on the Judge’s acceptance of the evidence of the First Defendant and Ms Naazirah in preference to the evidence of the Claimant.

44. When a judge accepts the evidence of one witness over another in cases of conflicting oral evidence, an appeal court will generally defer to the trial judge’s finding. This is because the trial judge has the advantage of observing the witnesses and assessing their credibility firsthand.

45. An appeal court may find the judge was wrong if the appeal court determines that the trial judge’s finding was clearly erroneous. This means that, despite some evidence supporting the finding, the appeal court is left with a firm conviction that the judge’s finding is wrong. The appeal court may reach such a conclusion based on objective facts proved independently of the witness’ testimony, in particular by reference to the documents in the case, or the inherent probabilities, or internal inconsistency, or other objective facts which lead to the conclusion that the judge’s finding is wrong.

46. None of those considerations apply here. The Judge’s finding was open to Her Excellency. There is no basis for finding it was wrong.

47. I do not consider that the Claimant’s appeal on the ground that she paid AED 75,000 and AED 10,000 in cash to the Second and First Defendants respectively would have a real prospect of success. There is no other compelling reason why her appeal on that ground should be heard. The Claimant’s PTA Application on that ground will be dismissed.

48. The second ground on which the Claimant seeks permission to appeal is that she did not sign the Licence Agreement, she signed a six page document that did not provide for payment in advance of a licence fee of AED 75,000 and did not provide for an early cancellation fee.

49. The Judge found that there was no disagreement between the parties in relation to the Licence Agreement, which Her Excellency described as the Tenancy Agreement.

50. Her Excellency may have been wrong. The Licence Agreement produced by the Second Defendant is a 14 page document. The Claimant’s signature appears on page 10. The obligation to pay the licence fee in advance is on page 6 and the amount of the licence fee is on page 11. The Claimant denies that she signed an agreement that contained the provisions found at pages 6 and 11. She says that she signed a six page agreement that that did not provide for payment in advance of a licence fee of AED 75,000 and did not provide for an early cancellation fee.

51. The Judge may have found that the Claimant is bound by the Licence Agreement because she signed it, notwithstanding the Claimant’s denial.

52. However, the Claimant may not be bound by an obligation to pay the licence fee in advance or a cancellation fee for a more fundamental reason.

53. The Claimant’s claim and the Second Defendant’s counterclaim in the SCT proceeded on the misconception that the Licence Agreement is an agreement between the Claimant and the Second Defendant and that the Licence Agreement gives rise to obligations and liabilities of the Claimant.

54. Ms Naazirah produced the Licence Agreement. It states that the parties are Nasrullah, an offshore company in Dubai, UAE, referred to as the Licensor, and Nadid, a limited liability company, which is described as the Licensee. The agreement was signed by Ms Naazirah on behalf of Nasrullah , the Second Defendant, and by the Claimant on behalf of Nadid.

55. On the hearing of the appeal, Ms Naazirah confirmed that the Licence Agreement was made by the Second Defendant with Nadid, a limited liability company.

56. The Licence Agreement provides that the Licensor, the Second Defendant, granted to the Licensee, Nadid, a non-exclusive licence to occupy the Designated Area, defined in the Licence Agreement.

57. The Licence Agreement provides that the Licensee, Nadid, shall pay the licence fee in advance and pay other amounts under the Licence Agreement.

58. Clause 13 provides that a person who is neither a party to the licence nor a party’s successor in title, has no right to enforce any of its terms.

59. On the face of it, the Licence Agreement does not confer any rights or obligations on the Claimant.

60. I consider that the Claimant’s appeal on the ground that she is not obliged to pay the Second Defendant the amount of AED 18,750 equivalent to three months of the rental value for early termination and the DIFC Courts’ filing fee in the amount of AED 937.50 has a real prospect of success. The Claimant will be granted permission to appeal against that order on the ground that she is not a party to the Licence Agreement.

Second Defendant’s appeal

61. For the reason I have stated, the Second Defendant’s claim has a fatal flaw. The Claimant did not make any agreement with the Second Defendant. The Licence Agreement is an agreement between the Second Defendant and Nadid, a limited liability company.

62. On the face of it, the Licence Agreement does not give rise to any obligations or liabilities of the Claimant.

63. Ms Naazirah did not suggest how the Claimant was responsible for any obligation of Nadid to pay the licence fee due under the Licence Agreement.

64. I do not consider that the Second Defendant’s appeal would have a real prospect of success. There is no other compelling reason why her appeal should be heard. The Second Defendant’s PTA Application will be dismissed.

Costs

65. Each party should bear their own costs of the appeal.