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CA 006/2013 Ahmed Zaki Beydoun v Daman Real Estate Capital Partners Limited

CA 006/2013 Ahmed Zaki Beydoun v Daman Real Estate Capital Partners Limited

March 26, 2014

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Claim No: CA 006/2013

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BETWEEN

AHMED ZAKI BEYDOUN

Claimant/Respondent in CA-006-2013

and

DAMAN REAL ESTATE CAPITAL PARTNERS LIMITED

First Defendant/Appellant


 

 

 

ORDER OF JUSTICE ROGER GILES


 

UPON reviewing the Appellant’s Application Notice CA-006-2013/1 dated 18 February 2014 and the supporting documents for permission to reopen the appeal;

AND UPON reviewing the Respondent’s submissions dated 24 March 2014 in response to the Application;

IT IS HEREBY ORDERED THAT:

1. Permission to reopen the appeal be granted.
2. Costs of the application be in the disposal of the Court of Appeal.

REASONS:

1. The central issue in the proceedings was whether the Respondent, Mr Ahmed Beydoun, had validly terminated an agreement with the Appellant, Daman Real Estate Capital Partners Limited, for the sale and purchase of a residential apartment in a property development in the DIFC (“the SPA“). At first instance, it was held that he had: Ahmed Zaki Beydoun v Daman Real Estate Capital Partners Limited, CFI-032-2012, 23 September 2013 (Deputy Chief Justice Sir Anthony Colman). An appeal from this decision was dismissed: CA-006-2013, 11 February 2014 (Chief Justice Michael Hwang SC, Deputy Chief Justice Sir John Chadwick and H.E. Justice Ali Al Madhani). This is an application by the Appellant for permission to reopen the appeal.
2. Such an application is considered by a single judge, ordinarily on paper and without service on the other party (RDC 44.187, 44.185) but subject to the judge directing service (RDC 44.185) or an oral hearing (RDC 44.188 “exceptionally”). However, the judge will not grant permission without directing that the application be served on the other party and giving him an opportunity to make representations (RDC 44.189). The application “will be allowed to proceed only if the Judge so directs” (44.187), but it is clear enough from references to the judge hearing the application and granting permission (RDC 44.188, 44.189) and to the finality of the judge’s decision on the application (RDC 44.190) that the judge’s consideration is not as a filter on the way to a hearing of the application by the original Court. It is a determination of the application itself with either the grant or the refusal to grant permission.

3. The grant or refusal is subject to the direction (RDC 44.180) that a final determination of an appeal will not be reopened unless—

“(1) It is necessary to do so in order to avoid real injustice;
(2) the circumstances are exceptional and make it appropriate to reopen the appeal; and
(3) there is no alternative effective remedy.”
4. Having perused the papers, I considered that the Respondent should be served with the application and invited to serve a written statement supporting or opposing it (RDC 44.186), in the event that he opposed it including his response to the Appellant’s grounds in support. The parties were also directed to file a joint memorandum drawing attention to any part of the transcript of the appeal hearing which either considered relevant to the application. The Respondent’s statement, by which it opposed the application, was duly provided. The joint memorandum was not, but the Respondent provided his transcript references. I do not think that there is anything exceptional whereby there should be an oral hearing.
5. For the reasons which follow, in my opinion permission to reopen the appeal should be granted. Since my decision is in the Appellant’s favour, I consider that I can proceed without receiving its transcript references, it being important that my decision be given promptly so that the parties can accommodate it to an imminent further hearing at first instance.
6. The SPA by Clause 11.3 entitled the Respondent to terminate it on 30 days’ notice if the apartment was not completed and ready for occupation within 12 months of the “Anticipated Completion Date” (“the ACD“), which was 31 July 2009 “or such later date as may be determined pursuant to Clause 4.1 or Clause 12.1”.

7. Clause 4.1 gave the Appellant the right to extend the ACD unilaterally by a period of up to 9 months by giving written notice to the Respondent. Clause 12.1 was in the terms—

“12.1 Seller shall not be considered to be in default or in breach of its obligations under this Agreement to the extent that performance of such obligations is prevented or delayed by an event of Force Majeure. If Seller considers that an event of Force Majeure has occurred, it shall notify Purchaser in writing, indicating the nature and expected duration or effect on Seller’s performance of the Force Majeure event in question, it being understood that Seller shall take reasonable measures which are available to it to minimise the effect of such event on the performance of its obligations hereunder. The Anticipated Completion Date shall be extended for a period of time equal to the delay in performance by Seller caused by the Force Majeure event.”

8. The definition of Force Majeure was extensive, relevantly encompassing failure of a contractor to the appellant to fulfill its contractual obligations if such event or circumstance was “beyond the reasonable control of [the Appellant], and…not the result of the fault or negligence of [the Appellant].”
9. The Respondent gave 30 days’ notice of termination by a letter of 9 July 2012, at which date the apartment was not completed and ready for occupation. This was more than 12 months after the original ACD of 31 July 2009. However, the Appellant contended that the ACD had been extended, such that the letter of 9 July 2012 was given less than 12 months after the extended date and was therefore ineffective.
10. At trial the focus was on two letters from the Appellant for their effect in extending the ACD, one of 28 June 2009 and the other of 25 November 2010.
11. The trial judge recorded how it became common ground that the letter of 28 June 2009 extended the ACD by the 9 months of Clause 4.1 and by a further period to the end of the first quarter of 2011 by reason of Force Majeure. He observed that this was contrary to his decision in other proceedings (Kenneth David Rohan and others v Daman Real Estate Capital Partners Limited, CFI-025-2012, 4 August 2012) that the letter was not capable of validly extending the ACD, but said that it was not necessary to review the common position. He held, however, that the letter of 25 November 2010 “was not sufficiently explicit to amount to a valid notice of extension of the ACD under either or both of clause 12.1 and clause 4.1”. The trial judge further expressed the views, whilst recording that the Respondent had not so submitted, that delay in sending the letter rendered it “an invalid attempt to substitute a second replacement ACD”, and that it was also ineffective because sent by email rather than in accordance with a notice clause in the SPA.
12. The result was that the letter of 9 July 2012 was more than 12 months after an extended ACD of 31 March 2011, and was effective to terminate the SPA. The trial judge went on, however, to consider whether there had in fact been events of Force Majeure after March 2011. He found that there had, and that the Appellant would have been entitled to rely on the period of contractor delay evidenced by the Engineer’s extension of time determinations as justifying the 12 months’ ACD extension notified in the letter of 25 November 2010. Had that been added to the conceded prior extension, the ACD would have become 31 March 2012, and in that event the Respondent’s termination of the SPA would have been an ineffective exercise of the right in Clause 11.3.
13. The principal judgment in the Court of Appeal was given by the Deputy Chief, with whom the Chief Justice and H.E. Justice Ali Al Madhani agreed.
14. The Court of Appeal heard the appeal concurrently with related appeals. As to the related appeals, the Deputy Chief Justice held that the Appellant’s letter of 28 June 2009 was not an effective exercise of the right in Clause 4.1, effectively upholding the trial judge’s view to the contrary of the common position. It was said that it was not necessary to consider whether the Respondent should be permitted to depart from the common ground.
15. That left the letter of 25 November 2010, and here the Court of Appeal departed from the reasoning of the trial judge.
16. It was held that that letter could not be a valid exercise of the right given by Clause 4.1 of the SPA (a question which had not arisen at trial because of the conceded prior exercise of that right). I have set out Clause 12.1 earlier in these reasons; it was held, in short, that the extension of the ACD required by its last sentence was not dependent on the content of a notice, or on any notice at all. Rather, it turned on whether in fact there had been events of Force Majeure and the delay in performance they had caused. The notification in the second sentence was of anticipated delay, not of actual delay, and nothing in the clause meant that failure to give notice disentitled the Appellant to extension of the ACD.

17. Having so held, the Deputy Chief Justice said—

“26. For those reasons — which differ in part from the reasons which attracted the trial judge and (I acknowledge) from the reasons advanced on behalf of the Purchasers at the hearing of these appeals — I would uphold the judge’s conclusion that the Appellant is not entitled to rely on the letters of 28 June 2009 or 25 November 2010 as a defence to the claims in these proceedings.”

18. The basis of the application for permission to re-open was that the reasoning of the Court of Appeal should have led to allowing the appeal, because if notice of events of Force Majeure was to be put aside there was left findings of the trial judge of bringing extension of the ACD to a date less than 12 months before 9 July 2012.
19. This called in question the dismissal of the appeal because the Appellant “is not entitled to rely on the letters of 28 June 2009 or 25 November 2010 as a defence to the claims in these proceedings”. As to extension of the ACD by reason of Force Majeure, the Deputy Chief Justice stepped from the holding that notice by the letter of 25 November 2010 was an unnecessary element in extension of the ACD pursuant to Clause 12.1, to rejection of an entitlement to rely on the two letters and dismissing the appeal.
20. This may have been an appropriate step had the Appellant’s case on appeal been tied to extension by the giving of notice. But it was not so tied. While the Appellant contended that it had given effective notice for the purposes of Clauses 4.1 and 12.1, on appeal it also contended that it was entitled to extension of the ACD pursuant to Clause 12.1 regardless of any notice. Its skeleton argument for the appeal included that notice was not a condition precedent to extension pursuant to Clause 12.1, and that the trial judge had therefore been in error in holding that the ACD had not been extended. It referred to the trial judge’s conclusion that, were the 25 November 2010 letter a valid notice, it would have been entitled to rely on the period of contractor delay evidenced by the Engineer’s extension of time determinations, and asserted that the ACD had been extended to the end of March 2012.
21. With respect, there appears to have been a slip in understanding the Appellant to have only relied on the letters of 28 June 2009 and 25 November 2010, and thus in not considering the translation of the holding concerning the operation of Clause 12.1 of the SPA to a result in the appeal. Nothing in the transcript references provided by the Respondent points to abandonment of the Appellant’s reliance on the alternative contention that it was entitled to extension of the ACD pursuant to Clause 12.1 regardless of any notice. Its case on appeal in this respect was not fully considered or dealt with (even by declining to allow it to put a case different from that put at trial).
22. Allowing the appeal called for attention to the further necessary requirement of the Appellant’s case, that there had been events of Force Majeure bringing the ACD to a date less than 12 months before 9 July 2012. I do not think I should express a concluded view on this; that will be a matter for the Court of Appeal in the event that the appeal is reopened. However, the strength of the Appellant’s case in this respect is material to whether there would be real injustice (RDC 44.180(1)) if it were left that the appeal is dismissed.
23. The Appellant needs about 24 months (31 July 2009-10 July 2011). It submitted that they are to be found in the 665 days (22 months) referred to in paragraph 39 of the trial judge’s reasons and the 5 months reasonably taken to replace the original contractor and make good defects referred to in paragraph 43 of those reasons.
24. There do not appear to have been findings by the trial judge as to these periods. The paragraphs were part of a recording of submissions. However, later paragraphs of the reasons suggest acceptance of the 5 months as Force Majeure delay, and the terms of the trial judge’s acceptance of the 12 months extension after March 2011, had there been proper notice, suggest acceptance of the 22 months. On the materials before me, and I do not have the benefit of ability to go to the evidence in order better to understand and assess the trial judge’s reasons, the Appellant has an argument of substance as to extension of the ACD by a sufficient period. I take into account also that the submissions in the Respondent’s statement do not contest, or deal at all with, the Appellant’s reference to the periods of 22 months and 5 months; indeed, they refer to a passage in the appeal transcript in which the Respondent sought to withdraw from the position that the Engineer’s determinations could be relied on to establish Force Majeure delay, from which it would appear that computation of Force Majeure delay was in issue.
25. If the Appellant failed fully to proper a case on computation of the ACD in the appeal, leaving the Court with little assistance as to the consequences of the operation of Clause 12.1 regardless of any notice, that could militate against permitting the appeal to be reopened. Permission to reopen is generally not to be given in order that the party can put a new argument or better put an old argument. There does not seem to have been detailed regard to computation in the submissions. On the other hand, the extension of the ACD pursuant to Clause 12.1 if there was no notice requirement was necessarily in the ring, a question to be dealt with even if the submissions were sketchy; and it is not uncommon for a Court to request supplementary submissions should a matter emerge with more prominence than it achieved in the hearing. The essential flaw remains that the Appellant’s case on appeal has not been fully considered.
26. The Respondent’s submissions were, in summary, that the Appellant was doing no more than complain that the reasoning in the judgment of the Court of Appeal was defective, and that the Appellant’s focus on Clause 12.1 of the SPA was misplaced; he also said that the Appellant in fact sought to rely on both letters as notices extending the ACD. These submissions misapprehend the Appellant’s position on the application.
27. In my view, what occurred can properly be seen as the “corruption of justice”, as graphically termed, seen in Re Uddin (a child) [2005] EWCA Civ 52 to which the Respondent drew attention, less graphically described undermining of the integrity of the litigation process, as the basis for a reopening. With specific reference to RDC 44.180, in my view there would be a real injustice if the Appellant were unable to reopen the appeal and submit that, on the construction of Clause 12.1 for which it contended and which found favour, that the appeal should be allowed. The apparent slip to which I have referred is fortunately exceptional, and consider that it warrants a reopening. Since the decision of the Court of Appeal is final (DIFC Court Law 2004, Section 26(6)), there is no effective alternative remedy. In my view, the requirements of RDC 44.180 are met, and it is appropriate to grant permission to reopen the appeal.

Issued by:
Mark Beer
Registrar
Date of Issue: 26 March 2014
At: 10am

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