Claim No: SCT 113/2017
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL
BEFORE SCT JUDGE MAHA AL MEHAIRI
(2) HASAN REAL ESTATE
Hearing: 4 June 2017
Further submissions: 18 June 2017
Judgment: 21 June 2017
JUDGMENT OF SCT JUDGE MAHA AL MEHAIRI
UPON hearing the Claimant and the Defendant
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1.The First Defendant shall pay the Claimant AED 3,050 as 2% of the commission fee.
2. The Second Defendant shall pay AED 4,950 as reimbursement of 3% of the commission fee that was paid by the First Defendant.
3. The First Defendant shall pay the Court fee in the amount of AED 399.
Date of issue: 21 June 2017
1.The Claimant is Hedwig Properties (the “Claimant”); a registered agency, providing marketing for residential units.
2. The First Defendant is Haynes (“First Defendant”); the tenant of Unit 42, , DIFC.
3. The Second Defendant is Hasan Real Estate (the “Second Defendant”); the landlord’s representative for Unit 42, , DIFC
Background and the Preceding History
4. The Claimant met the First Defendant through Heaton, one of the Agents working for the Claimant (the “Agent”). On 25 March 2017, the Agent and the First Defendant agreed to meet for the viewing of furnished units in DIFC. The Agent arranged a viewing for two units, 42 and 43. After the viewing, the First Defendant was keen to proceed with unit 42 (the “Unit”). He requested for the Agent to arrange for the cleaning of the sofa and carpet within the Unit, this was done through the Second Defendant, being the landlord of the Unit.
5. The First Defendant put forward an offer of AED 165,000 for the Agent to negotiate on his behalf with the Second Defendant; this was accepted with 4 cheques. The First Defendant requested for a meeting to be arranged in the Second Defendant’s offices on 3 April 2017, to sign the contract and issue the rent cheques, including the agency fee of AED 8,000 (being 5% of the rent of AED 165,000). Upon further discussion at the Second Defendant’s office, with the Second Defendant’s representative, Hein, the First Defendant failed to bring the full deposit of AED 15,000 to secure the unit (as instructed to by the Agent) as he only wanted to pay the 5% agency fee, not the AED 15,000 routinely required to book a unit. The Agent and First Defendant agreed to meet the following day, being 4 April 2017, when the First Defendant would bring the full amount. The Agent’s Manager also telephoned the First Defendant, explaining to him again, that payment of the AED 15,0000 deposit was necessary to book the Unit or any other furnished units in the building.
6. On 4 April 2017, the First Defendant contacted the Second Defendant through one of their employees called Mrs Hedy, to proceed in leasing the apartment without the knowledge of the Claimant. The Agent received a notification that the Unit was off the market as it was being rented by someone through the Second Defendant. As such, the Agent contacted Mr Hein who dealt with the First Defendant at their initial meeting in the Second Defendant’s office, asking if the new tenant was the same person that they met at their initial meeting in their offices and he confirmed that the First Defendant had proceeded with renting the Unit that was introduced to him, and negotiated for him by the Agent, as stated in an email chain between Mr Hein and the Agent dated 3 April 2017:
The Agent’s email to Mr Hein
I just received the availability list and unit 42 is not available.
Do you advise if you have been in contact with our clients directly, whom we both had a meeting yesterday to negotiate in renting the same unit.
Mr. Hein’s reply to the Agent:
As per our discussion regarding SG 42 I realized from the document received passport copy for Mr : Haynes as he contact our call center team
Yesterday and requested to book SG 42, hand over AED 15000 through our office in DIFC to proceed accordingly .
7. When the Claimant confronted the First Defendant, he denied the fact that he contacted the Second Defendant directly. When the Claimant’s Agent confirmed that the lease was finalised with the First Defendant by Mr Hein, she requested that the First Defendant pay the owed 5% agency fees for the Claimant’s services leading to his lease of the Unit. However, there was never a response from him, despite being called multiple times and an invoice being sent to him without any response. The Claimant also tried to settle the matter with the Second Defendant’s representative, Mrs Hedy, by initially requesting that the contract and remaining procedures be finalised through the Claimant, but her response was that it cannot be done, even though there is an agreement in place to market and bring potential tenants to lease units in DIFC. The First Defendant then alleged that he knew the Second Defendant from Kuwait in an attempt to avoid paying the 5% agency fees.
8. On 15 May 2017, the Claimant filed a case in the Small Claims Tribunal seeking payment of the agency fees in the amount of AED 8,000, claiming that the Agent’s work led to the lease of the Unit.
9. The Claimant, First Defendant, and the Second Defendant’s representatives attended on 30 May 2017 before SCT Judge Ayesha Bin Kalban. However, the parties were unable to reach a settlement during or after the Consultation.
10. As the parties could not reach a settlement they were called for a Hearing before me on 4 June 2017, at which time I heard submissions from the Claimant, First Defendant, and the Second Defendant’s representative.
Particulars and Defence
11. The Claimant argued in his Claim Form that as an agency, it did everything that needed to be done to rent out the Unit and managed to negotiate the price on behalf of the First Defendant, arrange for cleaning of the Unit and sat down with the representative of the Second Defendant to finalise the issues that were of concern to the First Defendant. It was up to the First Defendant to proceed with the lease or look for another apartment with another agency, in which case the matter would have ended. However, the First Defendant contacted the Second Defendant directly through its call centre and requested the same Unit that was showed to him by the Claimant, he proceeded to finalise the lease and moved in with the same price that was negotiated by the Claimant. As such, the Claimant believes that they are entitled to the 5% agency fee in the amount of AED 8,000.
12. In the Hearing, the First Defendant’s reply to the matter was that he did not deny knowing the Claimant, he also did not deny meeting Mr Hein the representative of the Second Defendant. In his oral submissions, he argued that when he met Mr Hein with the Claimant’s Agent he did not like the way that Mr Hein talked to him and that made him change his mind about moving forward with the lease. He then argued that from that incident he decided to call the Second Defendant’s office directly without the Agent and see what would happen from there. A meeting was arranged with Mrs Hedy, the Second Defendant’s representative and he decided to move forward with the lease. The First Defendant never denied the fact that he viewed the Unit with the Agent until the end of the hearing when he argued that he did not view the Unit with the Agent, he viewed it through Mr Hedy. As such, if he did not view the Unit through the Agent then the Agent is not entitled to the 5% agency fee as claimed.
13. The Second Defendant’s oral submissions in the hearing included the assertion that the First Defendant was not introduced to the Second Defendant by the Claimant with any official letter indicating the nature of the request, i.e. who he was and what he wanted. The Second Defendant was a direct client that called the customer service number and was introduced to Mrs Hedy as a walk-in client who then proceeded to lease the Unit. As a direct client Mrs Hedy asked the First Defendant if there is any agent involved and he denied that. As such, the Second Defendant’s position is that it should not be held accountable for what happened between the Claimant and the First Defendant.
14. First and foremost, the relevant issue falls under DIFC Courts’ jurisdiction as it concerns premises which are located within the DIFC. Therefore, it is clear and undisputed that the DIFC Courts have jurisdiction to decide this matter and should apply DIFC Law in doing so. As the claim value is less than AED 500,000, this claim is properly before the Small Claims Tribunal of the DIFC Courts.
15. There is just one issue to be decided in this dispute: whether the Claimant provide a service to be entitled for the 5% or not and if they did what are the obligations that are appropriate.
16. It is obvious from the submissions and the oral submissions in the hearing that there is no official contract put in place to organise the obligations on each party, however, there would have been a mutual understanding of what services the Claimant as an agency was expected to provide and I am of the opinion that those services have been rendered by the Claimant. Even though there is no official contract, the work of introducing the First Defendant to the Second Defendant, organising a viewing of the Unit and negotiating the rent was completed by the Claimant.
17. The Claimant also provided an email dated 25 March 2017 between the Agent and Mr Hein confirming that the Unit was viewed to the First Defendant:
My Client is very keen to go ahead with unit 42, however during the viewing he noticed that the sofa and carpet area bit old and stained.
He would like to know if there is a possibility to Change this as he would then go ahead to book it immediately.
Please advise at the earliest.
And Mr. Hein’s reply was:
Kindly be informed that the required cleaning it will be done for the sofa and the carpet by our team before move in date .
18. In the hearing, the First Defendant did not deny the fact the he viewed the Unit with the Agent but at the end of the hearing he argued that he never saw the Unit with the Agent and he viewed the Unit with Mrs Hedy. The Court is satisfied that the First Defendant contradicts himself and that the Unit was viewed to him through the Agent based on the email correspondence between the Agent and Mr Hein and the oral submissions.
19. Furthermore, the Claimant provided evidence that the Second Defendant did know that the First Defendant was their initial client, though it was not obvious at the beginning because the First Defendant came through the call centre as a walk-in. However, even after becoming aware they decided to go through with the lease and receive the amount of AED 4,950 from the First Defendant as commission.
20. This leaves the question of the appropriate remedy to grant the Claimant for its service to the First Defendant. The Court is of the opinion that the Claimant did its job in arranging viewing of the Unit, organising cleaning, negotiating prices and liaising with the landlord’s representatives and has therefore fulfilled its duty towards its client. If the First Defendant decided to proceed with another apartment, that would have ended the relationship but as he found an alternative way to rent the same apartment that was initially shown to him by the Claimant, that qualifies the Claimant to earn the 5% agency fees.
21. For the reasons stated above, the Court sees the First Defendant liable for the 5% agency fees in the amount of AED 8,000. Since the First Defendant has already paid the amount of AED 4,950 to the Second Defendant as commission for the Unit, the Court directs the First Defendant to pay the Claimant the amount of AED 3,050, and the Second Defendant will pay the amount of AED 4,950 reimbursement of the commission fee paid by the First Defendant. The First Defendant shall also reimburse the Claimant for the DIFC Courts’ fee in the amount of AED 399.
Date of issue: 21 June 2017