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Normandie V Norris [2023] DIFC SCT 419

July 29, 2024 SCT - JUDGMENTS AND ORDERS

Claim No: SCT 419/2023

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

NORMANDIE

Claimant / Applicant

and

NORRIS

Defendant / Respondent

---

ORDER WITH REASONS OF JUSTICE ANDREW MORAN

---

UPON reviewing the Judgment of H.E. Justice Nassir Al Nasser (the “Judge”) dated 20 June 2024 (the “Judgment”)

AND UPON reviewing the Claimant’s Appeal Notice dated 4 July 2024 seeking permission to appeal the Judgment (the “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 Claimant/Applicant and the Defendant/Respondent made at a hearing held on 18 July 2024 (the “Hearing”)

IT IS HEREBY ORDERED THAT:

1. Permission to Appeal is granted, limited to the first and second grounds at paragraph 2 a) and b) of the Statement of Appeal.

2. Each party shall bear their own costs of the Application.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of Issue: 29 July 2024
At: 8am

SCHEDULE OF REASONS

1. By an Appeal Notice, including the required application for Permission to Appeal, issued on 4 July 2024 (the “Application”), the Claimant/Applicant and intending Appellant, Normandie, (hereafter the “Applicant”) seeks permission to appeal the Judgement of H.E. Justice Nassir Al Nasser (the “Judgement”) sitting in the Small Claims Tribunal (the “SCT” or the “lower court”), of 20 June 2024.

2. The Judgement upheld the Applicant’s claim made against Norris (the “Defendant” in the lower court and the “Respondent” to the Application and hereafter referred to as such) for payment of the amount of AED 106,375.09 and the court’s fees in the sum of AED 5,318.80.

3. By his Judgment, the learned Judge ordered as follows:

“1. The Defendant shall pay the Claimant the sum of AED 106,376.09

2. The Defendant’s counterclaim shall be dismissed.

3. The Agreement shall be considered terminated.

4. The Defendant shall pay the Claimant the court fees in the sum of AED 5,318.80.

5. The Defendant’s counterclaims shall be dismissed.

6. The Defendant shall bear the court fee of the Counterclaim.”

4. Under Rule 53.87 of the Rules of the Dubai International Financial Centre Courts 2014 (the “RDC”), the “Court”, meaning the Court to which an appeal is made, will allow an appeal where the decision of the lower court was:

“ (1) wrong;

(2) unjust because of a serious procedural or other irregularity in the proceedings; or

(3) wrong in relation to any other matter provided for or under any law.”

5. By RDC 53.89, an application for permission to appeal a decision of the SCT, must be made to the Court of First Instance in a particular form, and under RDC 53.91, permission to appeal may only be granted by me as a judge of the Court of First Instance:

“where:

(1) the Court considers that the appeal would have a real prospect of success; or

(2) there is some other compelling reason why the appeal should be heard.”

6. Application of that test, or satisfaction that its requirements have been met, obviously requires a prospective inquiry and assessment. In short, an applicant/intending appellant must show that there is a real (i.e. a realistic as opposed to a fanciful) prospect of persuading an Appeal Court, that the judge of first instance, in the Small Claims Tribunal was wrong in what he decided or proceeded in a manner that was unjust. This requirement must be satisfied by the grounds of appeal advanced, and submissions made at an oral hearing (if one is held as it was in this case), showing how it is contended that the judge erred in his findings and decision.

7. In this case, an Application for Permission to Appeal (and Appeal if permission is granted) is brought on the basis of three requests, which when explained and justified by the Applicant, represented the grounds of its Appeal; and they are referred to in the order and hereafter as “grounds”. It sought:

“(a) Revision of the awarded claim relating to the poorly performed work. (AED 169,890)

(b) Compensation for expert fees. (AED 9,450)

(c) Compensation for financial losses incurred because of their professional negligence.”

8. Regarding the first ground, the Applicant explained at the Hearing that the Judge had awarded liquidated damages for delay (which was 10% of the price as provided for in clause 2.7 of the Agreement) namely AED 62,905; and compensation for overpayment for the value of works done in the amount of AED 43,470.99, based on the expert report, amounting together to AED 106,376.09 (as calculated with a very small error by the Judge). However, the cost of rectification of the poorly executed work was not quantified by the Judge and, consequently, the Claimant has not been compensated for these costs incurred or to be incurred. The Applicant had engaged a contractor who estimated that the necessary repairs would cost AED 169,890.00 to carry out, and the contractor’s estimate was placed before the Judge as evidence in support of this claim. Thus, it is submitted, the Judge was wrong in failing to consider, or by omitting to consider and determine, the additional claim for the costs of rectification of defects.

9. Ground 2 concerns expert fees. The Applicant stated that during the hearing held on 5 February 2024, Judge H.E. Justice Nassir Al Nasser directed the appointment of an expert, with both parties being required to share the expert’s costs equally in the first place, but he also indicated that the successful party would be compensated for its share of the payment. I have had the recording checked and the relevant direction and indication given by the Judge, was as follows:

“Both parties will be responsible for the expert expenses paid in half, and then at the end of the case, the unsuccessful party will then compensate the successful party on the expert fees”.

The Applicant submitted that as the successful party, it should be entitled to recover these expenses, amounting to AED 9,450.00 as the Judge had indicated during the hearing. The judge should have dealt in his Judgement with the issue, and was wrong in not addressing and overlooking it.

10. As to ground 3, the Claimant stated that the Judge was wrong in not considering compensation for the financial losses incurred due to the Defendant’s delay in completion of the works.

11. In response, the Defendant did not make any written submissions to the Court. However, during the Hearing, by its representative it contested the contents of the expert report regarding the delay and the amount overpaid. It argued for the appointment of a different expert (and was informed by me that this Court was not empowered to make such an order upon the hearing of an application by the Claimant for Permission to Appeal). The Defendant frankly admitted that it should pay the expert’s fee to the Claimant.

12. Having considered the Claimant’s written and oral submissions in support of its Application, and the Respondent’s oral submissions in response, I am satisfied that Permission to Appeal should be granted limited to the extent and grounds now specified, for the following reasons now given.

13. As to the first ground in the document entitled “Revision of the Award”, It is clear to me that the Claimant brought a claim before the SCT that was a separate and distinct claim (from the claim based on the Expert’s determination of the difference between the value of work actually done in performing the contract and the amount paid by the Claimant for that work – i.e. the amount overpaid of AED 43,470.99), about the defective quality of work done, requiring rectification at a cost the Claimant would have to bear, by reason of the Respondent’s breaches of contract.

14. In my judgment, there is a realistic prospect that the Claimant might satisfy an Appeal Court that the Judge was wrong in his Judgment. Firstly, not on the ground advanced by the Claimant that the Judge did not deal with this separate claim for the costs of rectification of defects at all; i.e. that he did not decide a claim that was before him; because he did appear to address the claim as the “snag list” at paragraphs 42-43 of the Judgment. Rather, it is because there is a realistic prospect his reason for rejecting the separate and distinct claim, would be found to be wrong by an Appeal Court. Limiting the amount awarded to the amount overpaid, on the basis of an assessed value of the work that was done; arguably, and with a realistic prospect of success, does not satisfy the requirement of “Full Compensation” under Article 110 of the Contract Law, if the Claimant is required to spend a substantial amount to rectify defects in work that was done. Secondly, there is a realistic prospect of an Appeal Court finding that had he applied Article 110, the Judge would and should have found that the Claimant was entitled to compensation for some, or all of the costs claimed of AED 169,890.00 specified in the estimate of Creative Solutions and Supplies, dated 14 June 2023, which had been placed before him.

15. Whilst at page 97 of his Final Report, the Expert detailed his observations of most of the defects requiring rectification upon his inspection of the works, he did not estimate the cost their rectification; and an Appeal Court may realistically conclude that the cost of rectification was not considered in his assessment of the amount overpaid. In those circumstances, there is a realistic prospect that an Appeal Court may award compensation for those costs, and permission to appeal on this ground or request is therefore granted.

16. As to the second ground or request for compensation for the Applicant’s payment of its share of the expert fees, The Applicant relied on the Judge’s indication that it would be able to recover its share of the expert’s fees if it was successful, and the fact that he did not award that paid share in his Judgment. Understandably, the Applicant was not able to recite the relevant rules dealing with the recovery of costs of proceedings before the SCT, which I now set out to demonstrate that the Judge was correct in his statement concerning the recovery of the share of the expert’s costs that the Applicant had paid, but which, probably by simple oversight, he did not award in his Judgment.

17. The relevant rules relating to allocation of costs in the SCT, may be set out as follows with my highlighting of the particularly relevant parts:

“Costs in the SCT

53.79

The General Rule is that each party shall bear its own costs.However, the SCT may order a party to a small claim to pay a sum to another party in respect of that other party’s costs, fees and expenses, including those relating to an appeal, where:

(1) such part of any Court or Tribunal fees paid by that other party as the SCT may consider appropriate.

(2) such further costs as the SCT may assess by the summary procedure and order to be paid by a party who has behaved unreasonably.”

[emphasis added]

The Rules specifically applying to proceedings in the SCT are set out in Part 53 of the RDC, but certain other Rules, not found in part 53, also apply by reason of the following Rule:

“Extent to which Other Parts Apply

53.7

The following Parts of the RDC shall apply to small claims except to the extent that a Rule limits such application or the SCT Judge orders otherwise:

(1) Parts 1 to 5;

(2) Part 9.6 (Service);

(3) Rules 29.9 to 29.11 (Evidence — power to control evidence);

(4) Rules 31.2 (Experts and assessors — general), 31.3 – 31.11 (Experts and assessors — overriding duty to the court), 31.12 – 31.18 (Experts and assessors — power to restrict expert evidence), 31.29 – 31.47 (Experts and assessors — power to appoint an expert)and 35.8 (Experts and assessors — instructions to a single joint expert).

(5) Part 36 (judgments and orders); and

(6) Parts 45 to 52.”

[emphasis added]

Therefore, as a result that RDC 53.7 (4) the Judge was empowered to order the unsuccessful party to pay the successful party’s share of the expert’s costs paid, by way of revision of his initial order on final judgment, under the following RDC 31.46:

“Court – Appointed expert

31.46

The Court may order that any party shall be responsible for part or all of the fees and expenses of a Court-appointed expert,including: (1) directing any party to pay an amount into Court; and (2) making payment to the expert on account to be revised on final judgment.”

[emphasis added]

18. I am therefore satisfied that there is a realistic prospect an Appeal Court would decide that the Judge did not enter upon the exercise of his power and discretion so to order; and that had he done so, he would and should have made an order directing the Respondent to pay the Claimant’s share of the expert’s costs in the amount of AED 9,450.00. In those circumstances permission to appeal on this second ground or request is therefore granted.

19. As to the third ground or request for permission to appeal, on the basis that the Judge did not award financial losses occasioned by the delay in completion of the work, this ground or request was in effect abandoned. That abandonment was by means of what can only be described as a frank and dawning smile of acceptance and realisation of the lack of merit in the ground or request, by the Applicant’s representative Miss Nereida, when I drew her attention to the last sentence of Clause 2.7 of the contract. In those circumstances permission to appeal on this third ground or request is therefore refused.

20. For all the foregoing reasons, I am satisfied that the Applicant has demonstrated a realistic, as opposed to a fanciful prospect of succeeding on appeal, and its Application for permission to appeal is therefore permitted for the first and second grounds.