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Mahesh Srichand Tourani v (1) Dusty Tourani (2) Duzty LLC [2018] DIFC CFI

Mahesh Srichand Tourani v (1) Dusty Tourani (2) Duzty LLC [2018] DIFC CFI

December 13, 2018

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Claim No. CFI-007-2018 

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

 

in the court of first instance

BEFORE CHIEF JUSTICE TUN ZAKI AZMI

 

BETWEEN

MAHESH SRICHAND TOURANI

Claimant

and

(1) DUSTY TOURANI

(2) DUZTY LLC

Defendants

 

 

Hearing: 26 August 2018

Counsel: Tim Taylor QC assisted by Joanne Strain of KWM (Mena) LLP for the Claimant
Sharif Shivji assisted by Andrew Rose instructed by Al Tamimi and Company for the Defendant

Submissions: 9 September 2018

Judgment: 13 December 2018


JUDGMENT OF THE CHIEF JUSTICE TUN ZAKI AZMI


 UPON the Claimants’ claim dated 22 January 2018

AND UPON reviewing the Court files

AND UPON hearing from Counsel for the Claimant and Counsel for the Defendant at trial held on 26 August 2018

IT IS HEREBY ORDERED THAT:

1.The Claimant’s Claim is dismissed.

2. The Claimant shall pay the Defendants’ costs of the Claim on the standard basis, to be assessed by the Registrar if not agreed.

Issued by:

Ayesha Bin Kalban

Assistant Registrar

Date of Issue: 13 December 2018

At: 4pm

 

JUDGMENT

Introduction

1.This case involves the Claimant, Mr Mahesh Srichand Tourani, a very wealthy Indian citizen (of Hindu religion) businessman living in Dubai. He was a divorcee who married the biological mother of the First Defendant, who was also a divorcee with two sons. The marriage was held by way of Hindu custom in the year 2005 and resulted in an acrimonious divorce in 2015. Soon after the acrimony started, a legal battle ensued between the Claimant and the First Defendant, Mr Dusty Tourani, who is the Claimant’s 30-year-old stepson, i.e. the son of the Claimant’s wife by her first marriage, over an amount of AED 14,947,348 which the Claimant alleged to be a loan. The First Defendant claimed the amount advanced to be a gift from the Claimant to him.

2. The Second Defendant is a company set up in the DIFC which was set up to own and run a restaurant called ‘Dusty’s’, also located in the DIFC. It was not denied that the disputed amount was invested in the restaurant.   The First Defendant and an individual by the name of Ms Hilda De Souza were the second directors of the Second Defendant. Though not relevant to the dispute, Ms Hilda was a member of the Tourani family’s household staff and making her a director was to enable her to continue staying in Dubai although she has passed the age of 65, which is the age by when household staff are to leave the United Arab Emirates, pursuant to the local laws in the country.

3. This suit is filed by the Claimant against the First and Second Defendants for the repayment of the said AED 14,947,348, who have not denied that this sum was disbursed for their benefit. In addition, the Claimant also pleaded unjustified enrichment on the part of the First and Second Defendants.

4. It is common ground that if the Court determines that the amount advanced was a gift, that finding is final and there are no outstanding issues in the case to be determined. However, if the Court finds that the amount advanced is not a gift, it will have to determine whether the amount is a loan or whether the First and Second Defendants were unjustifiably enriched and are therefore to compensate the Claimant for his loss. If such was the case this would of course be a quasi-contract. In order for me to determine this, I will have to look into the background leading to the giving of the loan and how the parties acted before this event, as well after the advances were disbursed. I will expand some of the facts elucidated above later in this reasoning.

5. The Court must of course not forget that the party who alleges must prove his case, but ultimately the Court will have to decide the case on the balance of probabilities.

Offer for Mediation

6. From the outset of this matter, I find that after reading the witness statements and the submissions, this is clearly a family dispute involving a stepfather and his stepson. Although the marriage had ended in the divorce by the time the claim was lodged, I thought that there should still be a chance given to the parties to find a global settlement particularly when reading through the witnesses’ statements that there were possibly other multifarious claims and counter claims not only between Claimant and the First Defendant but also the Claimant’s ex-wife, the mother of the First Defendant.

7. Before the trial began, I met counsel from both parties in closed doors with the Assistant Registrar and suggested that the parties should find a way of settling the claim at hand, along with other related disputes. I told them Dubai, being an Islamic territory, encourages mediation as a form of alternative dispute resolution, and therefore I encouraged the parties that they should attempt to undergo mediation. I directed that the trial would not be postponed seeing as it had been fixed for three days, with the Claimant being scheduled to testify by way of video conferencing from the United Kingdom. I also took into account the Court and the parties’ expenses and costs that would be affected should I direct that the hearing be postponed. The parties indicated their willingness to attempt a settlement, and therefore the Registry liaised with the parties to arrange a settlement meeting. So as not to in anyway possibly to influence my decision, I directed that the mediation be assigned to another judge of the DIFC Courts, seeing as I thought it best that the only facts of the dispute to be brought before me are those that would have been adduced during trial. Justice Ali Al Madhani agreed to act as a mediator for the session, and thus the mediation was held before him. The major problem confronting the process of mediation was the fact that the Claimant was in England and there is a three-hour time difference between England and Dubai. The First Defendant and his mother and ex-wife of the Claimant were in Dubai. Of course, the ideal condition was for the mediator to see one party, listen to the party’s demands, and then see the other party in the absence of the first party. It may take a few separate meetings before the mediator may be able to identify the real issues between the parties. It will be on the basis of offer and counter offer. Finally, the mediator may wish to bring both parties together. There may be instances where the meeting between the parties will be without their respective lawyers. In Malaysia and I believe in Singapore too, in appropriate cases, mediation has been relatively successful. The advantages of settlement by mediation are many. They include confidentiality, the settlement will be final, of course each party will have to give in some and win some and most importantly, mediation allows for the continuation of the relationship between parties (although it may not be likely to be so in this case).

8. I allowed the parties time to go through the process of mediation while trial proceeded to be held before me accordingly.

9. Unfortunately, after more than a couple of weeks, I was informed by the Registry that the process of mediation failed. I also received further submissions from the parties quite some time after the trial, hence the delay in preparing this judgment.

Backdrop

10. The Claimant was from Sindhi, India who had migrated to Dubai and successfully invested in textile business through his company called Wassamula. He was also involved in property development with some other partner, resulting in his wealth.

11. As set out above, the Claimant was a divorcee.  He later married the First Defendant’s mother, Mrs. Rekha Tourani, which I will refer to in this judgment as “Rekha”. At the time of the marriage in 2005 the First Defendant was 17 years old. The evidence showed that it started off as a happy marriage with the Claimant admittedly treating his two stepsons extremely well, providing them with the necessities of life of a wealthy family.

12. In mid-2015, the relationship between Claimant and his wife soured, with Rekha accusing Claimant of being involved with a young girl and the Claimant accusing the wife of being involved with another man. The demand for divorce by Rekha to Claimant was on 13 August 2015 when, as admitted by Claimant, there was ‘a change of relationship’ between the two. The accusation and counter accusation as well as other claims and counter claims are the subject of several suits in the Dubai Courts. This particular case I understand, is brought to the DIFC Courts because the First Defendant’s restaurant Dusty’s, which is named as the Second Defendant, is located within DIFC. I am not aware of the facts surrounding the other suits in the Dubai Courts and I consider them irrelevant to this case before me. Also, except where relevant, I am ignoring the other disputes between Claimant and his ex-wife as well as his two stepchildren in the other cases.

Evidence by the Claimant

13. The Claimant gave evidence by way of a video conference call from the United Kingdom. The Claimant was deported by the UAE authorities and was not allowed to reenter the UAE. Why he was deported or why he was not allowed to enter the UAE is of no concern to me for the purpose of this case. These facts were not pleaded and therefore are irrelevant.

14. The Claimant did not deny that, prior to the occurrence of the facts that led to the divorce, he had treated the First Defendant and his brother well, to my mind as well as if not better than his own biological children. He had blamed his ex-wife for inducing him to be overly generous with his stepsons. The First Defendant was sent to a university in Texas, USA, with all expenses born by the Claimant. He was subsequently sent for attachment to a certain business to gain experience again with all expenses paid by the Claimant. He was there for over 6 months and was put on in a luxurious accommodation. When the First Defendant became older and completed his education, he was given a supplementary credit card with credit limit of up to AED10,000. The Claimant took the boys for holidays with his ex-wife at his personal expense. The Claimant admitted that his two stepsons were rather spoilt, with the First Defendant enjoying his weekends drinking, which resulted in him crashing the Claimant’s Bentley to the extent that it had to be written off. The Claimant, however, instructed a lawyer and paid the fine on behalf of the First Defendant to get him out of an incarceration on the charge of drunken driving. Soon after the incident, the Claimant purchased a new Bentley and the First Defendant “tagged along” to the Claimant’s visit to purchase it.

15. The Claimant admitted that the demand by Rekha as a settlement of the divorce contributed to him filing this claim. During cross examination, he admitted that the demand for divorce was ‘the catalyst to my repayment (sic) of the loan. I don’t deny it at all. It was …given the fact that she had laid claim to various things of mine, and this is my thing I need to have it[1].” The letter from Rekha seeking a divorce was dated 13 August 2015, after which date the Claimant again admitted there was a change of relationship between Claimant and his ex-wife. Around that time, the Claimant was upset because his ex-wife refused to follow him to London to check the polyp on his ear, which the doctor he was seeing had suspected could be cancerous. Even according to the evidence given of Mr Balraj Kishan Sharma (hereafter “Balraj”), there was some reluctance by the Claimant to issue cheques for the First and Second Defendant’s benefits during the time divorce proceedings commenced which was against his practice before then. I will elaborate further on Balraj’s evidence in my judgment.

16. During the good times in the Claimant’s relationship with Rekha, they had set up two trusts in Switzerland with the First Defendant and his brother being the beneficiaries. Under these two trusts which were worth a lot of money, the two stepsons were the final beneficiaries after Claimant’s death and the death of his ex-wife. Of course, by now the trusts have been now terminated by him as the settlor.

17. Evidence was also adduced that he had allowed the First Defendant and his brother to use his surname ‘Tourani’ as their own surname. At the time this case was filed, this was reflected in their passports although their passports also recorded their biological father’s name. For the purpose of the First Defendant to obtain a visa to visit the United States of America, the Claimant signed a letter addressed to the Immigration Authorities of the USA referring to the First Defendant as ‘my son’.  According to the Claimant’s evidence, this was to aid the First Defendant in obtaining a visa to visit the USA. This was corroborated by his book keeper, Balraj, who prepared the letter for him to sign.

18. There was a lengthy cross examination as to why there was no formal loan agreement. His response was that it was not normal in Indian custom to express giving of money in these circumstances as a loan. That was why the advancement was not reduced to writing. According to the Claimant, there were several discussions between his ex-wife and the First Defendant over this advance of money towards the business.

19. From the testimony of the Claimant and his witness Balraj, I find that the Claimant, although a very successful businessman, seems to be quite cavalier in his spending or giving out his money, as far as his ex-wife and stepsons were concerned. He seemed to be more interested in ensuring that there is enough money in his account for cheques to be honoured when they are issued. Perhaps this is due to the stringent law of the UAE that a signatory to a cheque, to use the words of his counsel, ‘can get into big trouble’ if his cheque is not honoured due to lack of funds in his account. The manner in which he went to replace his written off Bentley was one example of his extravagance. Furthermore, according to his own witness and book keeper Balraj, the Claimant gave instructions to Balraj to have monies ready in the Claimant’s account whenever his wife or the First Defendant needed money. On one occasion, the wife required AED50,000 for her expenses. His duty was to ensure there was enough money in his boss’ account every time his boss issues a cheque towards his business.  Balraj also admitted that there was no record of disbursement kept by him before this case was filed. Balraj had to trace back the vouchers from suppliers of furniture, utensils and kitchen provisions to determine the amount that was advanced towards the restaurant. Balraj produced a pile of vouchers to support the amount advanced to the First Defendant, which turned to become unnecessary as the amount advanced was not disputed. Balraj also admitted that he was not aware of how or why the money was spent by the First and Second Defendants, at least before this case was filed. Balraj submitted that duty was only to make sure there was money in the account when cheques were issued, stating that he was merely a book keeper and claimed that he understood the amount advanced to the First Defendant to be a loan. This statement to him, if it was at all made by the Claimant to him, was merely made by the way. He did not retain any written record evidencing that the amount was a loan, which in my view renders his and the Claimant’s claim that it was indeed a loan difficult to ascertain. If it was meant to be a loan, a book keeper would have been expected to retain a proper record of every cent or Dirham that was advanced on behalf of his boss.

20. Going through Balraj’s witness statement and what was said in the cross examination, I have to conclude that he was not a reliable witness. I am therefore reluctant to accept his statements that the money advanced to the First Defendant was meant to be a loan. During his cross examination, Balraj delayed answering questions by asking counsel to either repeat or clarify the questions. From this I conclude that he was taking time to think what sort of answers he should give. I do not consider him to be a witness who is not intelligent to the extent of not being able to understand the questions. I have had to intervene on many occasions to explain the questions to him and even then, he would take the answer on a different tangent. Secondly, the Claimant was supposed to have told him that the amount advanced to the First and Defendants were to be a loan and that this incident took place in the ‘Blue Room’ (a name given to a room in Claimant’s house). It was supposed to have taken place in December 2014. There was no explanation of how he could remember the incident as well as the date, i.e. December 2014, when there was no reason for him to have specially remembered the date. He also admitted that it did not matter to him whether the advanced made to the First and Second Defendants was a loan or a gift. In his words “It is his money”, when referring to the Claimant[2].

21. There was some confusion as to the allegation by counsel for the Defendants that in November or December 2014, a certain amount of AED 3.5 million was supposed to be set aside for the First and Second Defendants and it was ‘kept in the side put on loan account, in a separate account, in Dusty’s, …’ (sic). It was supposed to be ‘key money’ which is money paid to a previous tenant.  I had asked the Claimant’s counsel to re-examine on this but that was not done. However, related to this 3.5 million was a cross examination by the Claimant’s counsel of the First Defendant.;

“Q: But you say that he used the words “This is a gift”?
A: He didn’t use that.  His exact words were “I’m — we are gifting this to you and I want you to work hard and expand with the profits.”  It was — it was clear that I wanted to not only open one, it was –I wanted to open two, three, four.  And that was the idea that we had discussed previously.”

22. In his submission, the Claimant’s counsel seemed to refer to this discussion as having taken place in December 2014. Balraj admitted there was nothing recorded in his book that the AED 3.5 million is a loan. If one were to read through the notes of evidence one will have to conclude that Balraj was trying to hide something instead of answering questions directly. These payments made in November of December 2014 were advanced for the payment of the restaurant’s rent[3].

23. There were some questions put to Balraj about dates appearing on cheques being inconsistent with the dates appearing on the bank statements relating to the cheques issued. Balraj explained that the process of presenting cheques to the bank and clearing them takes a certain amount of time, which results in inconsistencies. I accept this as a reasonable explanation.

24. There were allegations during cross examinations that Balraj wanted to please his boss, the Claimant, so that he could continue to remain in the Claimant’s employment. He also admitted owing some money to the Claimant. I believe these facts could go against Balraj’s credibility as a witness, as there is every likelihood that he would like to please the Claimant, his master. Based on the inconsistencies in testimony and the manner in which he seemed to be avoiding questions, I find that his evidence unreliable. Although, in general terms, the relationship between and employer and an employee itself is not a ground for discrediting an individual, in this case this witness has a motive to not be entirely truthful in the light of his interest in protecting the Claimant. (See Onassis v Vergottis [1968] 2 Lloyds Rep 403 at p 431). This can be clearly seen from the notes of proceedings.

25. The second witness called by the Claimant is Mr Firas Al Shoufi, who was his solicitor for cases brought in the Dubai Courts. My understanding is that this witness was only to testify on the matters that are filed in the Dubai Courts, but not as to the facts contained within these cases. Mr Al Shoufi did not wish to waive privilege as the solicitor to the Claimant.  He admitted that, according to the proceedings in the Dubai Courts, the Defendants’ initial and primary defence was that the advance was a gift although they added in other defences. They did not withdraw the defence of gift.

26. The chronological order of the Claimant’s testimony on what took place regarding the claim for the repayment of the so-called loan with the date when his divorce proceedings started may be relevant for consideration as to whether the Defendant’s claim that the loan issue arose only as a result of the divorce.

27. There seems to be inconsistencies in the statements by the Claimant as to when the so-called loan was meant to be repaid. At first, the Claimant stated that the loan was to be repaid within three months after the restaurant started operating, which was in September 2015. During the course of the cross examination, the Claimant then submitted that all he wanted was the loan to be repaid as and when the First Defendant was able to do so. Nearing to the conclusion of the cross examination, he admitted that the money was not due until it was demanded but could not make any demand because he did not know how well the business was doing. He also admitted not asking for the accounts for the restaurant until 2018, some years after the restaurant opened. At one point, he said the money was to be due for repayment only when the business would start doing well. Finally, he said all he wanted was the loan to be paid, irrespective of whether the restaurant was making money or not, adding that if the restaurant was not making money, the restaurant could be auctioned off. During cross examination, his attention was drawn to his witness statement in another case filed in the Dubai Courts, where it was stated that the loan was to be repaid upon incorporation of the company which he admitted was in February 2015. He also explained that ‘after incorporation’ was to mean after a reasonable demand was made. It was clear from these inconsistent statements that even he was not sure when the loan was due to be repaid, if it was indeed meant to a loan.

28. It was denied that the monies that went to the First Defendant and business of the Second Defendant came from joint accounts held by Claimant and his wife. The allegation was that because the money came from the joint accounts it could not be the Claimant’s money only. On this issue, he explained that he had joint accounts with his wife only for convenience, adding in that if something happened to either one of them then the other can continue to operate the account. I find this to be a reasonable explanation, however, the funds, although in the joint account still originated from his own business and not from his wife. There was no evidence to indicate that the wife had participated in the operation of his business or any of the accounts, although she was a signatory to them.

29. On the allegation of his generosity with his stepsons on their education as well as after their education, the Claimant admitted to it. On the reason why the loan was given to the First Defendant, as I had said earlier, the Claimant submitted that it was at the behest of his wife.

The Defence

30. The First Defendant and his mother were called as witnesses for the defence.

31. The Claimant alleged that the Defendant was not clear with their defences. To use the words of counsel for the Claimant, the defence was ‘a moving target’, from claiming that it was a gift to claiming to the advances were paid by the Claimant in consideration or as compensation for the First Defendant ceding to the Claimant 50% of shares in a BVI Company called MD Hospitality. It was alleged that M stood for Mahesh, the Claimant, and D for Dusty, the First Defendant. That investment, it was submitted, was for a 25% stake in a failed night club called ‘Pacha Night Club’ in Dubai. On the Pacha loan, the Claimant explained that it was meant to be a loan and would be repayable only from profits of the night club, but unfortunately their co-investors absconded although the Claimant was still trying to negotiate with co-investors for some form of settlement, I suppose.

32. There was also a small issue which I do not consider relevant to this claim, relating to a claim made by the Claimant against the First Defendant in the Dubai Courts for AED 1 million as compensation for the Bentley that was damaged in the accident, resulting from the drunken driving of the First Defendant.

33. The case led by the defence is basically what was put to the Claimant in his cross examination, that the amount advanced was a gift and not a loan. The First Defendant testified that he was treated like a son by the Claimant and was given all the benefits of a child from a wealthy family. The evidence relating to the Claimant’s sponsorship of the First Defendant’s education, which was not denied by the Claimant, was repeated by the First Defendant as well as his mother.

34. I cannot find anything within the witness statement and cross examination of the First Defendant and his mother to be inconsistent with their claim that the money was meant to be a gift. In fact, it merely went to support the Defendants’ claim that it was meant to be a gift.

35. The Claimant’s cross examination of Rekha, in my opinion, was to show that she was dubious and manipulative, which would affect her credibility.

36. The First Defendant’s mother Rekha was cross examined about her working life in Singapore, her previous marriage and how she was divorced from her first husband. Her first marriage took place when she was working in Singapore. Her then husband later got into trouble with the law, was arrested and incarcerated in prison in Kuala Lumpur. As a result Rekha and her then husband divorced in February 2011. There was some questioning about how the divorce took place, as well as on the condition of her life with her mother, which she stated was hard, that resulted in her agreeing to marry her first husband. The First Defendant and his brother were born out of this marriage. In my view, these facts are not relevant to the case before me.

37. There were also lengthy questions as to how Rekha got to know the Claimant, and that although he was divorced from his previous wife, he could not marry Rekha due to a clause in the Claimant’s divorce agreement with his first wife that if he remarried within five years, he would lose custody of his children by that marriage. Pursuant to this, the Claimant and Rekha just went to the temple and formalised the marriage therein, without formal civil registration of the marriage. To Rekha, she accepted that they were husband and wife and entered into such a relationship. As was admitted by him, he treated her and her children very well, the details of which had been discussed earlier.

38. There were also questions as to whether Rekha was still married to her first husband when she went through temple marriage with Claimant. I also do not find this relevant to the issue before me.

39. Regarding the written off Bentley, Rekha submitted that the car was a gift to the First Defendant, although the Dubai Courts have ordered the First Defendant to compensate the Claimant for having destroyed the vehicle in the accident. Again, in my view, this finding by the Dubai Courts was made in accordance with Dubai onshore laws and is irrelevant to this case.

40. There were some questions about the Claimant’s children by his previous marriage and questions about their custody and relationship. Again, I consider all these irrelevant to the real issue before me.

41. There was one part of Rekha’s testimony[4] when, according to her, the Claimant said to the First Defendant “This is a gift from your mom and me to you. As parents, this is a gift for your future, go make your life”. Again, according to her, the issue that it was meant to be a loan never came up until the Claimant wanted to get remarried and wanted a divorce from her. Unfortunately, this was never put to the Claimant by the Defendants’ counsel during his cross examination. There were some questions about the terms of divorce between the Claimant and Rekha as well as about the Claimant’s invitation to Rekha to follow him to London, as well as the allegation that she was following another man in India. Again, these are attempts to create a poor image of Rekha.

42. Rekha admitted that she felt this claim as filed by the Claimant is in fact an extension of the quarrel between she and the Claimant over their divorce. This is in line what the Claimant had testified. As referred to in paragraph 17 above, the Claimant did admit that the divorce claim by Rekha against him in fact was the catalyst for him filing this present claim.

43. There was also cross examination of Rekha regarding a misunderstanding she had with the Dubai Police. However, these facts are not relevant to the claim before me.

44. I must admit one point that had bothered me was that why a stepfather would want to give as a gift to his stepson such a large sum of money, unlike a biological child. However, considering the relationship between the Claimant and the First Defendant and his other stepson as well as his then wife, it is most probable he would do so. I became more convinced considering his wealth which Rekha alleged to be in the amount of a few hundred million United States Dollars, a statement that she was not cross examined upon and was not denied by the Claimant. I have therefore to accept that he was indeed worth that amount of money. Therefore, I find it fair to assume that an amount AED 14 million could be just a small amount for him to give away to someone, who although may legally be a stepson, was treated more than one.

45. The Claimant pleaded unjustifiable enrichment by the First and Second Defendants, but regretfully, as can be evidenced from the transcript, counsel for Claimant is unable to explain to the Court how, in the context of this case, the law of unjustifiable enrichment applies. In any case, considering the conclusion I arrive at in this case, this aspect of pleading is irrelevant.

 Findings

46. As I had mentioned at the beginning of my judgment, it was common ground that if the Court finds that the AED 14,947,348 advanced by the Claimant to the First Defendant for his as well as the use and benefit of the Second Defendant is a gift, then it is final. It is a complete defence to the claim under contract, as well as to the claim under restitution i.e. unjustified enrichment. If it is found that the advancement does not amount to a gift then the question arises as to whether it is a loan and if it is not a loan, whether the First and Second Defendants are liable to the Claimant for having been unjustifiably enriched.

47. It is also not disputed between the parties that the burden to prove his case lies on the Claimant, based on the balance of probabilities.

48. The Claimant based his claim that the AED 14,947,348 was meant to be a loan to the First Defendant and this was performed at the behest of his ex-wife.

49. After the marriage of Claimant to Rekha, he admitted, and it was supported by facts, that he treated his two stepsons extremely well, lavishing them with the privileges of children of a wealthy family. He did not seem to withhold any benefits from them. They were made beneficiaries to his two trusts, notwithstanding that they will benefit from these trusts upon his and his wife’s deaths. Even after the First Defendant damaged his AED 1 million Bentley, the Claimant aided him in being released from police custody and charges. When he went to buy a replacement Bentley, the First Defendant went along with him. Even at this situation, it did not appear that he was angry with his stepson.

50. As to the allegation that the defence were relying on a number of possible defences, in my opinion, this is not unusual. The Defendants’ principal defence was that the advancement was a gift. This was also in line with the First Defendant as well as his mother’s witness statement. It was also consistent with the answer provided by the witnesses during cross examination.

51. More important, however, was the way the Claimant and his book keeper Balraj acted when monies were disbursed towards the setting up and initial running of the restaurant. There were no proper records maintained of disbursements towards the restaurant. His book keeper had to obtain the amounts advanced as well as the purpose for which the advances were expended in some instances from the suppliers of equipment for the restaurant. In my view, it is not the way a lender or his book keeper would behave if it is a loan. One would have expected that the records are well kept. I therefore am reluctant to accept the words of the book keeper that it was a loan.

52. The book keeper concluded that advances were meant to be a loan because according to him that was what the Claimant told him and that he had also discussed the repayment of the loan with the 1st Defendant from time to time.

53. As for the Claimant, it took some time for him to respond to particulars requested by the Defendants to support his claim that money was meant to be a loan. The agreement as pleaded and adduced by oral evidence in court was that it was entered into orally. Under RDC 17.41:

“Where a party relies on an oral agreement, the statement of case should set out the contractual words used and state by whom, to whom, when and where they were spoken”

Based on the Claimant’s own evidence, the contractual words and other circumstances under which those words were made were very vague. It is not incorrect for an oral contract to be entered into by exchanges of communications over a period of time, as was claimed by the Claimant himself, but on the facts adduced there was no such evidence. On the contrary, I find that Claimant did not himself know what the terms were to be, because as discussed above, he kept changing his story as to how and when he expected the loan to be repaid. If he himself is unsure of what he wanted, how could there be a consensus of the terms between he and the First Defendant? Having a consensus of terms of an agreement ad idem is a basic requirement before an agreement is deemed to be entered into. As Viscount Simon L.C stated in G. Scammel and Nephew v J.G Ouston [1941] A.C 251:

“[This Order…] is so vaguely expressed that it cannot, standing by itself, be given as a definite meaning—that is to say it requires further agreement to be reached between the parties before there would be a complete consensus ad idem. If so, there was no contract and therefore no breach.”

Therefore, I have to conclude that a material term is missing from this so-called contract entered into between the Claimant and the First Defendant and there is therefore, no contract.

54. It was also a contentious issue as to whether the First Defendant was unclear in the cases in the Dubai Courts as to whether their defence was to be a gift or meant to be a consideration for the redemption of shares in the Pacha Night Club company. To the Claimant, because the First Defendant was unsure what defence he was putting in the Dubai Court case, showed that he himself was not sure whether the amount advanced was to be a gift or a loan.

55. On this particular issue, it is my opinion that the subject of the case that the Claimant or the Defendant put in the Dubai Courts is not relevant in this DIFC Courts, except in respect of credibility of witness evidence. The record of the hearing in the Dubai Courts was part of the bundle of documents in this Court. Seeing as the witness evidence, if any, given in the Dubai Courts was not evidentially challenged as to its credibility in this Court, I have decided not to place any value to such evidence. Counsel for both parties agree that the evidence of the Claimant’s second witness was merely tendering the records of the court in Dubai he was not testifying as a witness. He was counsel acting for the Claimant in the various cases pending in the Dubai Courts although he was from the firm acting as co-counsel in this case.  This is in line with Practice Direction 1 of 2016.

56. After having gone through the evidence of all the witnesses for the Claimant and the Defendants, it is my decision that when the Claimant extended the advances amounting to AED 14 million, he did not intend that the monies be repaid. Until the incidences first occurred that led to the divorce of Claimant from Rekha, his actions all showed that he had been treating his two step children like his own biological sons. He had showered them with all the privileges and wealth, to the extent of naming them as beneficiaries to two of his trust funds. He funded them their education as well as holidays. He allowed them to use his surname in their passports. He even went to the extent of certifying to the USA Immigration Authority that they were his sons.

57. The evidence adduced by him by bringing his book keeper Balraj to corroborate his evidence that the advances were loans in my view was a total failure. I say so because Balraj did not seem to have kept his books the way one would have done so if it had been a loan. I would have expected the book keeper to have full and detailed records of the amount as well as to whom and for what purposes the advances were made. Even if they were not kept in such detail, I would have expected him to be able to produce a record reflecting it was a loan of a certain fixed amount. In this case, however, the original amount claimed is AED 19 million but was subsequently reduced to the amount claimed in this action after the audit was done.

58. As I had explained above, If the advances were meant to be a loan, the Claimant would have expected his book keeper to maintain a better record than what the book keeper had kept. The record was so bad that the book keeper had to resort to suppliers and other contractors who had supplied utensils or done renovation to the restaurant before he could say how much was paid out by the Claimant.

59. The cross examination of the First Defendant and Rekha did not help in strengthening the Claimant’s case.  A lot of the statements made within their evidence were irrelevant.

60. As mentioned in the beginning both parties agreed that if I conclude that the advances amounted to a gift, then that is final. I also regret to say that on the facts of this case I am unable to understand how unjustifiable enrichment can be applied. The transcript reflects that counsel for Claimant was unable to assist me on this issue. It is however irrelevant since I now conclude the amount advanced by the Claimant to the Defendants was a gift, rather than a loan.

Order

61. I order that the Claim be dismissed with costs. The costs of this claim are to be paid to the Defendants by the Claimant on the standard basis, to be assessed by the Registrar if not agreed between the parties.

 

Issued by:

Ayesha Bin Kalban

Assistant Registrar

Date of Issue: 13 December 2018

At: 4pm

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