Claim No. SCT 030/2014
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 TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE SHAMLAN AL SAWALEHI
Hearing: 9 June 2014
Hearing: Claimant is represented by Eamon
Defendant is represented by Eagle
Judgment: 22 June 2014
JUDGMENT OF H.E. JUSTICE SHAMLAN AL SAWALEHI
1. The Claimant is Efron, trading as Efron (hereinafter referred to as Efron), a financial and corporate public relations and communications services company.
2. The Defendant is Efua (hereinafter referred to as Efua), a Dubai-based real estate investment trust incorporated in the DIFC.
3. Efua appointed Efron to provide specialist financial and corporate public relations and communication services in connection with its initial public offering (IPO) on Nasdaq Dubai. The contract consisted of an Engagement Letter, Scope of Work and Standard Terms of Business. The Contract was formally executed on 7 October 2013 despite work that commenced between the two parties before that date. Subsequently, the contract was verbally terminated.
4. On 23 December 2013, Efron commenced proceedings against Efua in the Small Claims Tribunal which was adjudicated under claim number XXX. Efron alleged that Efua had breached Clause 8 of the Contract by failing to pay three months’ fees payable upon termination of the Contract and sought payment of USD $45,000 in addition to court fees.
5. H.E. Justice Shamlan Al Sawalehi held that Efron had made an offer to Efua to act as financial public relations consultants on 19 September 2013 which was accepted and affirmed by Efua as a contract on 7 October 2013 and that consequently, “both parties’ obligations under the contract commenced on 7 October 2013 and not before.” Judge Shamlan ordered ER to pay AED 162,000 in addition to court fees.
The New Claim
6. On 5 May 2014, Efron filed a new claim in the Small Claims Tribunal for an outstanding amount Efron alleges that Efua still owes the amount of USD $7,204.39 in connection with the same contract which was the subject of the first proceedings. Efron alleges this sum relates to agreed and approved expenses incurred by the Claimant while fulfilling consultancy tasks for Efua. The claim is for full settlement of the alleged outstanding amount in addition to court fees.
7. The Claimant Efron also filed several invoices and e-mail correspondence, in particular, ‘Invoice Number 30,’ which outlines the details of the full amount sought which includes a media training session and travel expenses including flight, hotel and taxi costs incurred in September to November of 2013.
Defendant’s Response and Position
8. On 12 May 2013 the Defendant, Efua filed their response rejecting Efron’s claim for payment of the expenses on three grounds:
a. Res Judicata — Efua asserts that the claim is precluded under the principle of res judicata because Efron’s claim for alleged unpaid expenses pursuant to the terms of the Contract related to matters in dispute in the first proceedings. The Defendant, Efron cites Henderson v. Henderson (1843) 3 Hare 100, and claims that Efron is prevented from bringing fresh proceedings in a matter that could and should have been litigated in the first proceedings.
b. No Contractual or Legal Obligation — Efua denies that it has any contractual or legal obligation to pay the expenses because Efron has allegedly failed to satisfy the agreed pre-conditions for reimbursement of expenses as set out in Clause 12 of the Contract.
c. Prior Agreement Superseded by the Judgment in the first set of proceedings — Efua alleges that since this Court has expressly determined that the Contract did not in fact come into effect until 7 October 2013, the parties’ respective obligations commenced on that date and not before. Therefore, any opinion expressed by Efua prior to the judgment in the first proceedings is not binding upon Efua and has been superseded by this Court’s express adjudication on this point.
9. For the reasons set out above, Efua submits that the Claimant Efron is not entitled to any of the relief it seeks and requests that the claim be dismissed in its entirety.
10. A consultation was attended by both the Claimant and the Defendant on 26 May 2014 before H.E. Justice Omar Almuhairi. No settlement was reached by the parties and as such a hearing was scheduled for 9 June 2014 before Justice Shamlan Al Sawalehi.
11. During the hearing, the Claimant requested the original relief sought in its Claim Form and asserted that the alleged amount owed to Efron had been promised to them as payable by the Defendant.
12. The Defendant denied these allegations on the grounds of res judicata and the assertion that any opinion expressed by Efua was no longer binding after the judgment in the first proceedings which had made clear that the start date of the Contract commenced on 7 October 2013; and the three largest expenses alleged had each been incurred by Efron prior to the commencement of the contract on 7 October 2013.
13. The Court reaffirms that the Contract commenced on 7 October 2013, and thus the obligations of the parties also commenced on the same date. Following this, Efua was not under an obligation to pay for September expenses. However, as per clause 12 of the Contract, expenses were to be recharged to Efua on two conditions: (i) it was done so “monthly in arrears”, and (ii) “provided always that costs in excess of US $1,000 shall be approved in writing in advance”.
14. Paying attention to the above, had Efron recharged the September expenses incurred in arrears in the month of October as the Contract required, Efua would be bound under the Contract to reimburse them for the same. This however was not done. The Court thus finds that Efua is only bound by the Contract to pay Efron towards the November expenses covered by the joint invoice (Invoice No 30), i.e. for the media training session as invoiced by xxxx Consultants 4 November 2013.
15. Further, the amount on the invoice by xxxx Consultants is AED 9,200, i.e. USD 2,505.10. However the amount on the invoice by Efron is USD 2,755.24. This represents a surcharge of approximately 10% on the original amount. Per clause 12 of the Contract, Efron reserves the right to add a 10% service charge on specific expenses such as print, reception venues, “and other similar items”. The Court finds that this is not inclusive of media training. Thus Efron did not have the right to charge an additional amount. Efua is only bound to reimburse Efron for the original amount, i.e. USD 2,505.10, subject to the second requirement under Clause 12, since this exceeds USD 1,000.
16. The second requirement requires advance approval in writing. In an email dated 15 December 2013 from James Anderson, he agreed to process payment if provided with the relevant invoices, which were provided in reply the next day. The Court finds that when approval is based on a condition and the condition is fulfilled, it implies the required approval.
17. In conclusion, the Court finds that the expenses incurred for media training had been approved by Efua. It thus orders Efua to reimburse Efron in the sum of AED 9,200, in addition to the court fee due to Efron, which is not entitled to charge an additional amount, for the reasons stated above.
Nassir Al Nasser
Date: 22 June 2014