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(1) Hepher Associates LTD. (2) Trevor Anscombe v Rasana Engineering Industries Co. LLC [2017] DIFC CFI 043

(1) Hepher Associates LTD. (2) Trevor Anscombe v Rasana Engineering Industries Co. LLC [2017] DIFC CFI 043

May 5, 2019

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Claim No. CFI-043-2017 

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 H.E. JUSTICE SHAMLAN AL SAWALEHI

BETWEEN

(1) HEPHER ASSOCIATES LTD

(2) TREVOR ANSCOMBE

Claimants/Appellants

  and

RASANA ENGINEERING INDUSTRIES CO. LLC

                                                                                            Defendant/Respondent

 

Hearing: 15 April 2019

Counsel: Jörg Seifert and Trevor Anscombe instructed by Al Sharif Advocates for the Claimant

No representative appeared on behalf of the Defendant

Judgment: 1 May 2019


JUDGEMENT OF H.E. JUSTICE SHAMLAN AL SAWALEHI


UPON reviewing the Claimant’s claim dated 20 September 2017

UPON the non-attendance of the Defendant and of its legal representatives at the Trial

UPON having reviewed the documents included in the Court file

UPON having heard Counsel for the Claimant at the Trial held on 15 April 2019

IT IS HEREBY ORDERED THAT:

1.The Defence is struck out pursuant to Rule 35.14(3) of the Rules of the DIFC Courts.

2. Judgment is hereby entered in favour of the Claimants as against the Defendant in the sum of AED 1,029,064.61 (the “Judgment Sum”), comprising:

a. AED 486,581.25 in satisfactions of the unpaid invoices;

b. AED 19,694 in satisfaction of the finance costs on the late payments as per the Consultancy Agreements at a rate of 12% annum;

c. AED 24,000 as reimbursement of the SCT filing fees; and

d. AED 498,789.36 as lost profits due to the Claimants.

3. The Defendant shall pay to the Claimants the Judgment Sum within 28 days of the date of this Judgment.

4. Pursuant to Practice Direction No. 4 of 2017, simple interest on the Judgment Sum shall accrue at a rate of 9% per annum from the date of this Judgment.

5. The costs shall be assessed by a Registrar upon application.

Issued by:

Ayesha Bin Kalban

Assistant Registrar

Date of issue: 5 May 2019

Time: 2pm

 

JUDGMENT

Procedural Background

1.The Claimants, Hepher Associates Ltd (the “First Claimant”) and Trevor Anscombe (the “Second Claimant), filed this claim on 20 September 2017 seeking payment of certain overdue invoices, interest, loss of profits, and the costs of the proceedings to include payment for personnel’s time in dealing with the case. The Claimants contended that the Defendant, Rasana Engineering Industries Co. LLC (the “Defendant”) failed to pay certain invoices for work that was carried out and furthermore, unjustly sought to reduce the hours billed by the Claimants in various invoices. The Claimants made minor administrative amendments to their Claim Form on 20 November 2017.

2. On 14 December 2017 the Claimant filed an Application for Default Judgment against the Defendant, considering that the Defendant had yet to participate in the proceedings. Having determined that the requirements of RDC Part 13 were met, Default Judgment was issued on 28 January 2018 via the Order of Judicial Officer Nassir Al Nasser (the “Default Judgment”). The Default Judgment provided the following:

i. The Defendant shall pay to the Claimant, within 14 days of this Order, AED 511,581.25 being the “Judgment Sum”.

ii. The Defendant shall pay the Claimant interest on the Judgment Sum at the rate of 12% per annum from the date of judgment until payment.

iii. The Defendant shall pay the Claimant’s legal costs and Court fees in the sum of AED 95,709.23.

3. On 20 February 2018 the Defendant filed its Application seeking to set aside the Default Judgment, seeking the appointment of an “auditor Expert to look into the file and to review the calculation between” the parties, and seeking for the Claimant to bear all legal costs (the “Set Aside Application”).

4. After reviewing submissions from the parties, the Default Judgment was set aside via the Order of H.E. Justice Shamlan Al Sawalehi dated 30 April 2018 (the “Set Aside Order”). The Set Aside Order stated that the Set Aside Application was granted on the “basis that the Defendant has a real prospect of successfully defending the claim.” The remainder of the Defendant’s requests contained within the Set Aside Application were rejected. The Parties were directed to subsequently file pleadings in the case.

5. The Claimants subsequently filed their Particulars of Claim. The Defendant filed its defence and the Claimants replied to the Defence. Furthermore, the Claimants filed an Offer to Settle.

6. The Parties gathered for a Case Management Conference before Judicial Officer Nassir Al Nasser on 23 September 2018. At this time, the parties agreed on a timetable for the remainder of the case, with such schedule reflected in the Amended Case Management Order of Judicial Officer Nassir Al Nasser, dated 1 November 2018. Trial for the matter was scheduled for 1 April 2019 with a duration of 1 day. The Trial was later postponed until 15 April 2019. The proceedings progressed with the Claimant filing a witness statement and expert report.

7. The Defendant did not make any further filings. Instead, the Defendant’s Counsel applied on 4 March 2019 to be officially removed as counsel of record for the Defendant, citing “consistent non-cooperation in production and submission of relevant documents and failure to comply with the procedural requisites, by the client, despite persistent duty of care and compliance as advanced by the Defendant lawyer in this regard.” The Defendant’s Counsel’s application was granted via the Order of Judicial Officer Nassir Al Nasser dated 4 March 2019. From that time, nothing further has been filed by the Defendant, however the Defendant did accept the Hearing date of 15 April 2019 via email.

8. As the Trial had been scheduled, the parties were expected to attend Court on 15 April 2019. The Claimants’ legal representatives were in attendance. However, the Defendant and the Defendant’s Counsel failed to attend Court at this time. Nonetheless, I found it appropriate to reserve judgment at the time, instructing the Claimants to provide any contact details for the Defendant should they have them. The Claimants did not file a Skeleton Argument in advance of the Trial.

The Claimant’s Arguments

9. The Claimants contend that the Defendant entered into five Consultancy Agreements with the First Claimant to provide “Contract Administration Support Services” and an “Extension of Time and Associated Time Impact Analysis Claim” for various construction projects within the UAE. The Claimants argue that there was no dispute between the parties until several invoices for works carried out in April and May 2017 remained unpaid for an extended period of time. The Claimants issued their notice to suspend/slow down work on 4 June 2017 as a result of these unpaid invoices.

10. On 5 June 2017, the Defendant issued assessments and deductions of the Claimant’s invoices without “logical or justified substantiation.” After a period of Amicable Settlement had expired on 4 July 2017, the Claimants proceeded with the suspension of all professional services to minimise the financial liability created by the Defendant. At this time the Defendant had an outstanding balance of AED 511,581.25 owed to the Claimants.

11. The parties continued to meet to discuss amicable settlement, but no settlement could be reached. Instead, the Defendant allegedly began reviewing all the historic invoices between the parties, not only the outstanding invoices, even though these past invoices had been signed off on by the Defendant’s personnel.

12. The Claimants then filed a case against the Defendant in the DIFC Courts’ Small Claims Tribunal (SCT). The parties participated in a lengthy settlement process which included meetings between themselves. However, the parties were unable to reach a settlement. The SCT case was then transferred to the Court of First Instance (CFI), resulting in these proceedings. Thus, the Claimants filed this case in the CFI seeking AED 511,581.25 as owed by the Defendant in addition to costs and legal fees associated with the dispute. The Claim is for non-payment of invoices for professional services rendered in accordance with the Consultancy Agreements signed by both parties.

13. The Claimants have provided ample evidence in support of their claims. The Particulars of Claim outline in detail the relationship between the parties and the sums allegedly owed by the Defendant. The Claimant also provides detailed responses to the Defendants listed objections to certain payment amounts. Furthermore, the Claimants provide extensive contemporary records to illustrate their points, including the agreements between the parties and the history of invoices and communications.

14. The Claimants have also submitted an extensive expert report, as prepared by Faithful+Gould Project Management LLC, which reviews the history of payments and calculations made by the Claimants. The Expert Report concludes that the invoices provided by the Claimants were without error.

15. At the Hearing, the Claimants reiterated their claims that they have invoiced their works correctly to the Defendant, as supported by the Expert Report.

The Defence

16. The Defendant argued in its Defence that certain parts of the Claimants’ invoicing were incorrect and must be contested.

17. However, I must take note of RDC 35.14 at this time. RDC 35.14 states:

“35.14

The Court may proceed with a trial in the absence of a party but:

(1) if no party attends the trial, it may strike out the whole of the proceedings;

(2) if the claimant does not attend, it may strike out his claim and any defence to counterclaim. The defendant may prove any counterclaim at trial and obtain judgment on his counterclaim and for costs; and

(3) if a defendant does not attend, it may strike out his defence or counterclaim (or both). The claimant may prove his claim at trial and obtain judgment on his claim and for costs.”

18. The Claimant did not make specific reference to RDC 35.14(3) at or after the Hearing. However, RDC 35.14(3) does not require application from the opposing party. Instead, the Court may act of its own initiative in this regard.

19. With reference to RDC 35.14(3), I find it appropriate in this circumstance to strike out the Defendant’s Defence, and to proceed on the basis of the Claimant’s oral and written submissions only. This is appropriate in the circumstances considering that the Defendant was fully aware of the Trial schedule and still failed to attend or to appoint and send its legal representatives.

Discussion

20. Given that the Defence has been struck out in full, the relevant assessment required in this matter is limited to a determination of whether the Claimants have proven their case by a preponderance of the evidence. While the Defence has been struck out, it is not assumed that the Claimants will be successful on their case. Instead, the Claimants must still prove their claims in oral and written submissions.

21. I find it undisputed that the Claimant and Defendant entered into the five Consultancy Agreements, as detailed by the Claimants and in the Expert Report. These agreements were valid and the parties proceeded as per their requirements for some time, until the breakdown of relationships in April/May 2017.

22. The Claimants have submitted documentary evidence of the relationship between the parties, including the relevant agreements and invoices. I find no issue with these documents as presented.

23. In reviewing the Claimants’ Expert Report, I find no question as to its authenticity or validity. The Expert Report concludes that “after assessing the dispute between [the Claimants] and [the Defendant] and the review of all the documentation presented for Case CFI-043-2017 of the Court of First Instance, we would recommend that [the Claimants] are awarded full reimbursement of all remaining fees less adjustment and errors as previously noted, plus interest for the outstanding unpaid Invoices as noted in Section 3.13.7 and all associated legal fees and expert costs. It is clear that [the Defendant was] in breach of the Terms and Conditions set out in the five (5) signed and approved Agreements.” The Expert Report continues “Therefore, [the Experts] recommend the final settlement value owed to [the Claimants] by [the Defendant] (excluding any interest, legal fees and expert costs) would be in the sum of AED 486,581.25.”

24. As the Expert Report has clearly laid out the basis for its conclusions, including appending the documentary evidence upon with the conclusions are made, I find no reason to reject the findings made therein. Instead, it is clear that the Expert Report details a valid analysis of the financial and contractual relationship between the parties.

25. Without any objections from the Defendant and without the benefit of the Defendant’s own appointed expert and expert report, I find that the Claimants have shown their case based upon a preponderance of the evidence. This is especially as to the unpaid invoices in the amount of AED 486,581.25 as confirmed by the Expert Report. As to the various other sums claimed by the Claimant, I will address them each in turn.

26. The Claimants claim AED 19,694 as finance costs on the late payments as per the Consultancy Agreements at a rate of 12% annum. I find that the Claimants have proven their entitlement to this sum based on the terms of the Consultancy Agreements and based upon their presentation of the finance calculations in Appendix G to the Particulars of Claim.

27. The Claimants have also claimed AED 24,000 as SCT fees. As this case was originally transferred from the SCT to the CFI, and as the filing fees paid in the SCT were deducted against the filing fees owed for this claim, the Claimant should thus be reimbursed. This is considering that the costs for these proceedings will also be awarded to the Claimants. Therefore, the Claimants claim for AED 24,000 for the SCT filing fee is also granted.

28. The Claimants also claim a total of AED 498,789.36 as “Loss of Profit Due to the Claimant.” This is broken down into various sums in Table N in the Particulars of Claim. The Claimants argue that “under the Law of the United Arab Emirates . . . with specific reference to Articles 282, 283, 284, 292 (Acts Causing Harm) and Article 318 and 319 (Unjust Enrichment) of the UAE Civil Transactions Law [they are] entitled to be recompensed for any financial loss incurred as a result of the Defendant’s failure to pay its outstanding invoices on time and thereby fulfilling its contractual obligations under the Consultancy Agreements.” The Claimants’ legal theory regarding Loss of Profits is permissible based upon the terms of the UAE Civil Transactions Law. Thus, the Claimants’ are eligible to collect their lost profits provided they can show, based on a preponderance of the evidence, how much those lost profits were.

29. As to showing the amounts owed, based on a careful review of the Particulars of Claim and the supporting documents, I find that the amounts claimed in Table N are shown, based upon a preponderance of the evidence, to have been agreed between the parties on 15 March 2017, as noted in section 2.2.3 of the Particulars of Claim. Thus, this amount of AED 498,789.36 should also be awarded to the Claimants.

30. As to the specific sums owed by the Defendant to the Claimants, the Claimants have submitted that the total judgment sum is AED 1,029,064.61. The Claimants’ calculations are deemed valid based upon a preponderance of the evidence, and I therefore find in favour of the Claimant as against the Defendant in the sum of AED 1,029,064.61 (hereafter the “Judgment Sum”), comprising:

a. AED 486,581.25 in satisfactions of the unpaid invoices;

b. AED 19,694 in satisfaction of the finance costs on the late payments as per the Consultancy Agreements at a rate of 12% annum;

c. AED 24,000 as reimbursement of the SCT filing fees; and

d. AED 498,789.36 as lost profits due to the Claimants.

31. Finally, pursuant to Practice Direction No. 4 of 2017, simple interest on the Judgment Sum shall accrue at a rate of 9% per annum from the date of this order.

32. In summary, the Claimants have submitted sufficient proof that their Claim is valid based upon a preponderance of the evidence. The Claimants’ calculations, based upon detailed payment records, have been shown to be valid and are supported by the Expert Report. As the Claimants’ reading of the Consultancy Agreements and UAE Federal Law are legally permissible and as there is no valid defence entered into the Court record, I find for the Claimant based upon a preponderance of the evidence.

Costs

33. The costs shall be assessed by a Registrar upon application.

Conclusion

34. In sum, the Claimant’s claims are granted in full with the Defendant responsible for the Claimant’s costs of these proceedings.

 

Issued by:

Ayesha Bin Kalban

Assistant Registrar

Date of issue: 5 May 2019

Time: 2pm

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