August 16, 2023 Technology and construction division - Orders
Claim No. TCD 003/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
THE TECHNOLOGY AND CONSTRUCTION DIVISION
RAFID GOURMET INVESTMENT IN COMMERCIAL ENTERPRISES & MANAGEMENT LLC
Claimant/Defendant to Counterclaim
DIF INTERIOR DECORATION CO. LLC
Defendant/Claimant to Counterclaim
|Trial :||10 – 12 July 2023|
Mr Glenn Bull instructed by Charles Russell Speechlys LLP for the Claimant
Mr Badih Moukarzel instructed by HLP Law Firm for the Defendant
|Judgment :||16 August 2023|
JUDGMENT OF JUSTICE MICHAEL BLACK
UPON hearing the counsel for the Claimant and counsel for the Defendant at a hearing held before me
AND UPON reviewing the Parties’ filings in this case
IT IS HEREBY ORDERED THAT:
1. The Claimant’s claim succeeds and the Claimant is entitled to damages in the sum of AED 612,246.
2. The Defendant’s counterclaim is dismissed.
3. The Parties shall serve submissions on interest and costs within 14 days of being notified of this judgment.
Date of Issue: 16 August 2023
SCHEDULE OF REASONS
1. Rafid Gourmet Investment in Commercial Enterprises & Management LLC (“Rafid”) operates a café and an award-winning modern Greek restaurant under the brand name of “OPSO” at Fashion Avenue, Dubai Mall. The restaurant is reached through the café and overlooks the Dubai Fountain and Burj Khalifa.
2. Due to the impact of COVID footfall in the Dubai Mall fell off dramatically, however it began to recover in the summer of 2020 and Rafid thought it would be a good time to refurbish the OPSO Café. The works were to be overseen by Rafid’s Director of Operations, Mark Taquet. Mr Taquet has extensive experience in the hospitality industry but no experience in the construction industry.
3. In August 2020 Mr Taquet approached DIF Interior Decoration Co LLC (“DIF”), a well-regarded fit-out contractor founded and run by architect, Sherif Mohamed Salah El Fadaly. There were discussions involving Mr Fadaly, Esam Baccush and Bai Akmad of DIF and later the owner of Rafid, Faisal Al Mandil.
4. In December 2020 Rafid and DIF agreed that DIF would produce drawings for the proposed works for the sum AED 10,500 and these were accompanied by a quotation and draft Bill of Quantities (“BOQ”).
5. There were further discussions leading to some revisions to the proposed works.
6. On 21 April 2021, DIF issued invoice RG-1311 to Rafid, for payment of the “Advance Payment” in the amount of AED 178,500 plus VAT.
7. DIF produced a further quotation dated 24 April 2021 in the sum of AED 850,000 plus VAT.
8. The terms of payment were as follows:
(a) 20% Advance Payment - 20th of April;
(b) 20% “Progress Payment against site work progress” – 31st of May;
(c) 20% “Progress Payment against site work progress” – 15th of June;
(d) 20% “Progress Payment against site work progress” – 30th of June;
(e) 10% Final Completion - 15th of July; and
(f) 10% Retention (up to Two Months).
9. The quotation was accompanied by a BOQ which contained further terms:
(a) “Timely payment is essential of the contract to ensure timely delivery of works completion. Payment delay beyond the scheduled dates as specified under the law of UAE our commercial offer might affect the project program/timeline which shall be demonstrated thereafter”;
(b) “Loose Furniture: Delivery dates are subject to payment dates and shipping schedule from Greece. In case shipment is hold or in the event of delay and any logistics disruption due to COVID-19 situation, schedule is to be re-assesed [sic] and will use the existing loose furniture temporarily for a limited period”; and
(c) “Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be subject to the exclusive jurisdiction of the courts of the Dubai International Financial Centre. This contract shall be governed by and construed in accordance with the law of Dubai.”
10. Rafid paid the Advance Payment Invoice on 28 April 2021 and Mr Taquet countersigned the quotation and applied the company stamp.
11. It is common ground between the parties that:
(a) the contract between them was formed when Mr Taquet countersigned the quotation;
(b) the reference to “be governed by and construed in accordance with the law of Dubai” is to be interpreted to mean that the proper law of the contract is DIFC law; and
(c) the first progress payment was to be made when 30% progress had been achieved.
12. The works included two different sets of hoardings: the external hoardings facing on to the Mall and the internal hoardings that screened the works off from customers of the restaurant passing though the café area.
13. The external hoardings had to be undertaken by Emaar’s approved contractors in accordance with their specifications. The approved contractor was Shadi Makdasi Decor Cont. LLC ("Makdasi"). Both the external and internal hoardings were apparently included in DIF’s scope of works. There are two sets of items in the quotation in relation to hoardings in the scope of works but unhelpfully they are in identical terms and so it is impossible to discern which is external and which is internal – one set (with Printed Graphics and including removal) is priced at AED 15,820 and the other at AED 11,450.
14. In the event and for reasons that are not wholly apparent, Rafid paid Makdasi direct against a quotation dated 20 May 2021 for AED 11,345 ex VAT. The quotation is not sufficiently detailed to enable me to compare it with DIF’s prices but given the similarity to the lower of the two I assume it related to that work and so AED 11,450 must be omitted from DIF’s workscope.
15. In the event the work was not carried out in May 2021 due to suspension of the project.
Suspension of the works
16. It was necessary to suspend the works because the Landlord (Emaar) did not grant permission to commence the works until (on or about) 24 October 2021 when permission was granted to commence the works on 1 November 2021. Mr Fadaly had already informed Mr Taquet by email dated 18 October 2021 that DIF would not be in a position to commence work on 1 November 2021 due to other work commitments and he requested a commencement date of 17 November 2021. Notwithstanding, according to Mr Fadaly, Mr Yukesh or Yogesh (DIF’s Project Manager) agreed a timeline with Mr Taquet.
17. This may be a reference to DIF’s programme dated 19 October 2021. The programme showed:
(a) The commencement of fit out activities on 1 November 2021 with a duration of 59 days ending on 1 January 2022;
(b) Shopfront glass window with extruded metal mesh below, Water Feature Floor Tile, Wall Unit, Retail Shelving and Buil[sic]-in Sofa – 2 to 8 November 2021;
(c) Flooring – 8 to 28 November 2021;
(d) Partitions – 11 to 21 November 2021;
(e) Electrical – 11 November to 12 December 2021;
(f) Ceiling – 28 November to 11 December 2021;
(g) Painting and Finishing – 11 to 22 December 2021;
(h) Plumbing work – 16 to 19 December 2021;
(i) Joinery work on site – 7 to 23 December 2021;
(j) IT installation and Signage Installation – 15 to 23 December 2021;
(k) Site handover – 20 to 25 December 2021.
18. It also appears that Mr Yukesh and another Project Manager, Mr Mohamed, left DIF around this time as mentioned in an email from Mr Taquet dated 20 October 2021 recording what was agreed a meeting on 19 October 2021. In that email he stated:
“I also requested that we are send the finalized timeframe schedule we agreed work would start on the 1st of November 2021 with a hand over date 31st December 2021 this was supposed to be sent this morning as it is also vital so the correct documents can be resubmitted, and works can start asap.”
It therefore appears that his recollection in his witness statement that the agreed completion date was 30 December 2021 is incorrect and that Mr Fadaly is correct in his recollection that after discussions with Mr Al Mandil 31 December was agreed to be the handover date. Mr Fadaly accepted in cross-examination that it was not desirable for customers to be walking through building works on New Year’s Eve. It is likely that Mr Taquet emphasized that DIF had to have completed the works, not only so as not to inconvenience the restaurant customers attending on New Year’s Eve, but also to enable the café to open for this important trading period at the Dubai Mall.
19. On 26 October 2021 Mr Taquet wrote to Mr Baccush. In his email he referred to the now superseded dates in the quotation and requested “the reworked cash flow document against the set progress stages and dates to be completed as per the renewed work plan sent that should hand the site over on the 30th of December 2021. The cashflow document should clearly mention the proposed date of each additional payment against the percentage of work that must be completed per each future payment.”
20. Mr Baccush replied on 27 October 2021 and specifically in relation to the second progress payment:
“Second payment: 20% Progress payment against site work progress 31st of May (no work has been completed) - We both have agreed that the works are on hold due to Emaar related issues , we are now ready to mobilise based on approvals being ready which as you seen Edgar has asked to resubmit, we have sent the form 3 for you to fill and then we will submit to Emaar. We have to receive - Anticipated date is 10th November 2021 - at 30% completion of works at site, factory and value of furniture.” [original emphasis]
21. Mr Taquet replied the same day, “Please check this each stage you have mentioned 30% completion I need this confirmed correctly as per the milestones set for completion of work”. In his oral evidence Mr Fadaly said that they connected payments into dates, they agreed 30% achievement as the target date. In his written evidence he said that he understood that Rafid wanted to adhere to the original payment terms. The original payment terms made no reference to “completion of works at … factory and value of furniture” but referred to “site progress”.
Commencement of the Works
22. Mr Fadaly went on to say that “on 30 October Emaar has issued permission to erect the hoarding, our team has coordinated with the appointed mall contractor Makdasi, and we deployed our manpower to start the site works. Since 30th October, our team have been working at continually to achieve the target of 10th November”.
23. Rafid disputes that DIF deployed its manpower to start the site works on 30 October 2021. At 3:35 AM 31 October 2021 Mr Taquet wrote to Mr Baccush (copied to Mr Fadaly) in the following terms:
“I hope moving forward things are more organised from your side your team did not arrange the security pass required to be onsite tonight to supervise the hoarding construction going up nor sent details for the permits required to enter the premises from tomorrow…
I would like to bring a couple of things to your attention there was complete confusion tonight in relation to phase one and two of the hoarding going up your team did not brief the hoarding team correctly and your site supervisor could not get any of you on the phone it was a complete mess. I intervened because they would have completely covered the entire facade and our restaurant would have looked closed seriously impacting our business for the coming week. It’s clear that Mohammed and Yogesh the previous project managers did not do a proper handover before exiting your company …
In short, the communication between your team at this point is terrible I am not here to problem solve your work onsite. if this continues, we are going to have serious issues as our restaurant must stay open and the site left in a condition that will allow our team to operate daily. I suggest you improve communications and have someone problem solve any future issues because we cannot jeopardise our daily operations in the coming months due to negligence on your part.”
24. Mr Fadaly rejected these criticisms in his oral evidence but I found that to be unrealistic given that far from rejecting them, that day Mr Baccuch directed his project team (copied to both Mr Taquet and Mr Fadaly) to address the issues and avoid or minimise any future issues on the site.
25. On 10 November 2021 at a meeting and by email Mr Taquet complained to DIF that the facade work, demolition work, MEP works and removal of the glass window were behind schedule. The shelving wall units and built-in furniture had not yet been completed. The flooring waterproofing of the water feature area and screeding plus surface preparation had not been completed. The partition walls were due to start from the morning of the 11th but he doubted this could happen as debris had not been cleared from the site.
26. On 11 November 2021 Dilip Menon, DIF’s Senior Project Manager, responded with minutes of the meeting. It was noted that there had been damage to a marble counter and to tiles in the restaurant area. Rafid’s branding was being revised and DIF was to continue in all areas where branding had no direct impact. He suggested that Mr Taquet wait until the following week for a factory visit and that an updated work plan would be provided before close of business.
27. On 14 November 2021 Mr Taquet told DIF to proceed with works in the corridor and stated that he was awaiting the redone work plan and confirmation on the site visit for the carpentry. On 17 November 2021 he again pressed for the new work plan and confirmation of the site visit. He expressed concern that he was unable to monitor progress without a work plan, very little work appeared to have been done and he questioned whether DIF would be able to finish on time.
28. On 18 November 2021 Mr Menon replied:
“The progress of works are happening in the factory as we speak to which I am awaiting my production team to confirm the site visit. Site progress is as below:
— curtains installed
— back wall (POP) has been removed
— water feature removed and we are doing screed
— Tiles have been procured and recrimination [sic] work will commence by tomorrow
— Ceiling paint to commence next week
— Furniture inspection is being done today for the items delivered at warehouse
— Marble rectification quote will be with you by Sunday COB
— Glass has been been [sic] removed fully in Phase one and we have checked the existing million inside – they are in different section and sizes - we are going to do a mock up by early next week to accommodate the LED, once approve we will produce the new cladding and proceed to complete the works at site
— Two cabinets steel carcass is ready and we will proceed for the color now - carcass and structure will be ready by end of next week
- Production of L- Shape tall cabinet is starting now - will provide the completion date”
Cessation of Works On Site
29. Notwithstanding the promises in relation to screeding, tiling, ceiling painting, glazing and cabinetry it is common ground that from 17 November 2021 DIF did not carry out any further works on site.
30. Mr Fadaly admits that the site progress was not impressive (his words) but due to the fact that majority of the works was off site but he seeks to explain the “unimpressive” site progress in two ways:
(a) In his written evidence he said that he could not understand Mr Taquet’s complaints claiming slow progress as DIF had not received any approval on shop drawings, materials or variations to the shop front and signage; and
(b) In his oral evidence said that DIF did everything necessary before bringing in works fabricated off site.
31. As to the first point, in his email of 18 November 2021 Mr Menon did ask whether drawings had been reviewed for the custom joinery and whether there was any update on the new branding to allow the provision of light points at the pillar cladding in eth shopfront area. He also suggested meeting to approve certain samples. On 24 November 2021 DIF submitted a quotation for varied work. Mr Taquet responded requesting a meeting and copies of the detailed design drawings as many of the things said to be variations were covered in the original scope.
32. On 28 November 2021 Mr Taquet visited the factory of AMG Technical Services LLC (“AMG”) who were joinery suppliers. He said it was obvious to him that hardly anything had been done. There were two steel frames and some wood on the floor. He spoke to the factory owner who said he was awaiting payment from DIF.
33. Mr Menon emailed Mr Taquet that day. In it he outlined what he said needed to be concluded:
(a) “Cabinet for Jewellery: Please note we have proceeded as per the submitted drawings and reference of the 3D wherein they are equally distributed. We will continue with the same detail as per you [sic] confirmation, should you have any change we need to discuss and close at the earliest.
(b) We are proceeding with the finishes as submitted in the material submission board for Paint finish (ceiling and wall), Metal finish, Wood Veneer ( matt not glossy ) etc, photo of the board shall be shared for confirmation , please acknowledge on receipt
(c) We will meet with Govind on 30th Morning at 10:00 AM at OPSO to discuss the detail drawings just to ensure we are all on the same page agenda for the discussion:
(i) Workshop drawing sing [sic] off
(ii) Discuss Cherry blossom in detail
(iii) Corridor detail as we have little more the previous cladding
(iv) Any finish if required that are already at site for reference
We also request the detail about the new branding so that cladding works can start, we cannot put into production unless we know the provision for the holes required for the light of the new LOGO.”
34. The next day Mr Taquet emailed Mr Menon. He says that he was now very concerned that the project would not be complete on time. In his email he said:
“I would like to express our concern after the factory visit today in Sharjah Sunday 3.30pm 28th November 2021 the work completed is minimal. tThe [sic] contractor has explained they have just moved to a new unit and location I am concerned that the work will not be completed on time. As you are fully aware we are now 29 days into the project, and it is now a major concern as after my inspection today we have not completed close to the 30% of works expected to date on and off site which I had discussed with Dilip today. [my emphasis]
At present on site the glass on the façade, the fountain and the fixed furniture has been removed although 50% is still onsite. The fountain has been semi filled but not screeded yet and the markings have been placed on the back wall shelving which is minimal for the work that should have been completed within the first month. The work plan resent to us is not specific to the daily work to be completed and with several external contractors visiting the site weekly there seems to be no clear sign or commitment by any of the workmen I have spoken to on site.
I also am concerned in relation to the detailed drawings that was sent from the design team there were a number of areas clearly shown in the design which was not identified by your team with Govind i.e., the blue lighting strip within the facade, which was clearly visible in the render, The cherry blossom tree and how it should be incorporated into the back of the bar and shelving. In addition to this you were instructed to come back to us with a design that would be approved by Dubai mall.
After we agreed and signed a contract your team came back to us stating that Dubai mall are now requesting a glass door to close the corridor which has now increased the overall price to have the job completed. It was clear from the design we were removing the facade surly your team should have considered and checked civil safety requirements fire safety as per Dubai mall standards which we clearly mentioned to you prior to starting.
With 30 days remaining now until the agreed handover date I would like to remind you if we pass this deadline, you will be held responsible and will incur late hand over charges by Rafid Gourmet and plus any additional by Dubai mall. We have locked in our marketing campaign, Soft and grand opening the costs associated run into the hundreds of thousands and any delay after the morning of the 30th of December 2021 will result in further loses to our company and possible damage of the brand.
We would like confirmation in writing that the projects completion date will be maintained by you as per the contract signed and would appreciate each contractor is available to meet with Mr Faisal Tuesday the 30th November at 10am onsite to finalize things.”
35. Mr Malek Khateib of AMG gave evidence before me. I did not find his evidence of any assistance as it lacked detail as to the date and amount of work done. He did however confirm that AMG’s contract was with DIF but DIF refused to pay outstanding payments on the grounds that DIF had not been paid by Rafid.
36. As to the second point, according to the 19 October 2021 programme the following were to have been completed by 28 November 2021:
(a) Shopfront glass window with extruded metal mesh below, Water Feature Floor Tile, Wall Unit, Retail Shelving and Buil[sic]-in Sofa;
(c) Partitions; and
(d) Electrical up to third fix.
The Claim for the First Progress Payment
37. Mr Fadaly says that by 30 November 2021 the situation was that DIF was on site with minimal open scope as the following items were not yet confirmed or under redesign:
(a) The shop front works;
(b) The blooms tree hanging from the ceiling;
(c) Approval on drawings;
(d) All joinery finishes and final colours; and
(e) Variations works requested by Emaar and Rafid.
He says that DIF had progressed:
(a) All joinery works as shown in AMG statement;
(b) All base cladding works;
(c) Procurement of all long lead items;
(d) Loose furniture delivered in UAE;
(e) All lining works;
(f) Demolition works; and
(g) All MEP works first fix and second.
DIF was waiting for lighting fixtures to be procured and to pay the shop front sub-contractor.
38. It seems to be common ground that the items set out paragraph 36 above had not been completed.
39. On 30 November 2021 DIF submitted its Invoice No.63 in the sum of AED 178,500 in respect of the first progress payment. DIF said it had completed 54% of the works, calculated as follows:
(a) Preliminaries - 51%;
(b) Hoarding erection;
(c) Demolition - 100%;
(d) Floor finishes - 80%;
(e) Wall cladding – 40%;
(f) Dry wall lining – 100%;
(g) False ceiling - 40%;
(h) Joinery works – 50% in all areas (except the Bakery Area at 0%);
(i) Loose furniture - 100%;
(j) Light fittings – 50%;
(k) Various pieces of artwork;
(l) Corridor feature wall joinery - 50%; and
(m) Electrical works – 20%.
40. Mr Fadaly was vague in his oral evidence as to how these percentages had been calculated. He suggested that they were assessed internally at DIF. I asked whether there were site diaries that might show progress. He admitted that there were site diaries but he was unable to explain why they had not been relied upon or produced.
41. The same day Mr Menon wrote to Mr Mr Taquet summarising the position:
(a) “We are to proceed with the samples that had been submitted last week and are still at the site for the Wood ( matt finish), Blue color as per the RAL code provided and the sample mock up provided, Metal Finish mirror finish and the brass for the counters, Mirror, Stencil art work, sliding channel for glass door, perforated metal sheet etc.,
(b) Height of the cabinet for the joinery to remain the same, we continue with the already produce metal structure that you have seen at the factory - both counters thereby shall be identical in terms of distribution of the shelving
(c) Shop front design change w.r.t branding shall be checked for required inclusions that are not currently part of the scope and we shall submit the variation of the additional works :
(i) LED back light
(ii) CNC cutting for the art work - OPSO to provide the art work file for the pillar at the earliest for us to convert the same in CAD for the CNC cutting
(iii) Additional electrical works
(iv) Additional support inside for the signage/cladding on either side in shopfront
(d) Cherry blossom, we are arranging for sample to match the material as per Faisal's request, we are still not clear on how you prefer the termination on the backwall. We can either bring it over the existing cabinet or we have to remove a section of the cabinet to allow the flowers to flow from the ceiling to the top of the back counter. The design is indicative and not as per the shop you had asked us to use as reference , please confirm same for us to provide a design. We have not agreed to have a mock yet as we need to get more detail on the design.
(e) LED light around the front facade is no longer required in the feature , please confirm
I am attaching with a summary of items that have been purchased, paid for and items that are already in the warehouse (furniture ) etc., to give you and idea of the value of works that are now done. We are now at a juncture that we cannot proceed without progressive payment. The biggest line item which is joinery has completed all the procurement and production is now at crucial stage. Based on the approvals on the samples now we will proceed to complete the works in the factory at the earliest.
(f) Joinery - Works in progress- 3 Cabinets are 50% and now finishes are to be done - Carcass is ready, metal has been fabricated ready for electroplating, cabinets are ready to receive paint/veneer finishes.
(g) Furniture - Furniture are in the warehouse, a report shall be sent on the next work day on each item with pictures
(h) Demolition and preliminary works (phase 1 hoarding , graphics etc.,) are complete
(i) Art work materials are purchased and paid for ready to be delivered - The summary sheet will show the values spent already
(j) Planter - are subject to approval of variation
Therefore, release of payment is crucial to ensuring the project is kept on track.”
Rafid Disputes the Progress Achieved
42. Mr Fadaly says that the lack of the design and construction processes from Rafid’s representative was creating frustration and heating up the relationship and that confirmation was finally received on 5 December 2021.
43. Mr Taquet wrote on 7 December 2021 asking that DIF do not deviate from the terms of the contract and stating that that payments will be released based on the milestones reached for completion of work as per the design not based on the raw materials purchased.
44. In his written evidence Mr Fadaly states that DIF received an email dated 8 December 2021 from Mr Al Mandil requesting again the workflow schedule and the new handover date and stating that he had agreed now to pay the outstanding payment to DIF. I have searched the documentary record in vain to find this email (and indeed others referred to by Mr Fadaly and his legal representatives). It is completely unacceptable for parties or their lawyers to refer to potentially important documents without producing them and proving their contents. The Court has no way of knowing if hearsay statements of the contents of such documents are accurate or being misrepresented.
45. In the instant case the suggestion that Mr Mandil gave an unconditional undertaking to make an immediate payment of the progress payment is inconsistent with the documents that are before me. On 9 December 2021 Mr Menon wrote to Mr Taquet enclosing timeline for he works and stating that “Above all it is imperative that the payment is now released at the earliest for these timeline to be achieved.” The email was copied to Mr Mandil and if he had given an unconditional agreement to pay the progress payment on the previous day it is surprising that reference was not be made to it.
46. Mr Taquet’s response of 11 December 2021 is also inconsistent with such an agreement. He was critical of the timeline produced and said it did not align with the payment terms. He requested a meeting to include Mr Al Mandil the following day. The meeting took place at OPSO at 2PM on 12 December 2021 and Mr Taquet recorded what was agreed in an email that day:
(a) DIF would send the revised cashflow and timeline for a completion and handover date of the 16th January 2022 keeping within the contractual payment terms;
(b) DIF would send over the full variation works quotation for the glass door and facade cladding by tomorrow latest;
(c) The look of the cherry blossom tree was agreed as per Mr Al Mandil’s requirement and DIF to come back to Rafid by tomorrow on how this will be constructed and implemented into the back wall. The lighting element was also agreed on for the cherry blossom tree. Mr Taquet again emphasized that Rafid was not the responsible party in relation to technical drawings and measurements and will not take responsibility for it;
(d) Rafid would appoint a project manager within the next three days to oversee all progress on the project from its side.
47. I therefore reject Mr Fadaly’s claim (not pleaded in the Defence and Counterclaim but repeated in written submissions) that Rafid agreed to pay the outstanding progress payment on 8 December 2021.
Reprogramming the Works
48. On 13 December 2021 DIF produced a revised programme. The document is telling and the following observations of Mr Taquet’s upon it in his witness statement were unchallenged:
(a) The demolition work, which was originally scheduled to commence on 2 November 2021 and be completed by 8 November 2021 was purportedly completed on 16 November 2021 (8 days late);
(b) Deep cleaning of the site and snagging works were purportedly done from 15 November 2021 to 18 November 2021. This however was entirely out of sequence and plainly wrong;
(c) Disregarding the supposed deep cleaning and snagging works that were not done, no works were carried out from 17 November 2021 to 1 December 2021. The works that purportedly started on 1 December, being joinery works, were not done on site. As such, the programme confirmed that no works at all had been done on site between 17 November 2021 and 13 December 2021;
(d) On 1 December 2021, DIF purportedly commenced fabrication of cabinets, and it was now reported in this updated programme that such works required 25 days to complete. It is noted that in the original programme, all joinery works had been scheduled to be completed within 16 days. The updated programme now showed a period of 34 days; and
(e) The release of the Second Payment was noted as not yet due. It was claimed the payment was not due to be released until 15 December 2021.
49. The programme appears to be inconsistent with the progress payment having been due on 30 November 2021 or an agreement to make the payment on 8 December 2021.
50. On 15 December 2021 Mr Taquet introduced Ms Natasha Abbas of North 51 Consulting (“N51”) as Project Manager on behalf of Rafid.
51. Ms Abbas is a highly-qualified, experienced and independent construction professional. She considered her function to get the project moving rather than assess the commercial claim. She is to be regarded as a witness of fact albeit that her understanding of the facts is informed by her expertise. I place considerable reliance on her evidence.
52.On or shortly after 15 December, Ms Abbas rang DIF and spoke to Mr Fadaly and Mr Baccush. They told her that they were waiting on the release of a further payment before they would resume the works as DIF had spent the whole of the advance payment on the procurement of the furniture and joinery. She arranged a “Kick Off Meeting” for 20 December 2021.
53. The minutes of the meeting recorded 8 actions:
(a) DIF to provide variation breakdown (fire door and front facade) and associated drawing by 23 Dec 21.
(b) N51 requested DIF to provide revised work programme and procurement tracker. DIF to provide revised programme of works effective 21.12.21 to project completion with detailed activity breakdown such that works can be monitored and progress valuation undertaken by 23 Dec 21.
(c) Weekly site progress meeting to be held every Monday PM. N51 to confirm time.
(d) Sample board to be presented by DIF for client sign off DIF by 23 Dec 21.
(e) DIF to liaise with EMAAR RDT to secure facade approval. N51 to be cc'd into all communication. All approvals remain the responsibility of fit out contractor.
(f) N51 to undertake DIF factory visit with Mr Taquet to evaluate off site progress. Date of factory visit to be confirmed by DIF by 23 Dec 21.
(g) DIF to raise list of RFI (requests for information) for any outstanding design clarification not design queries.
(h) Date of Next meeting: 28.12.21
54. In addition, it was agreed that Ms Abbas would carry out an assessment of the progress of the works.
55. On 27 December 2021 Ms Abbas wrote Mr Baccush in the following terms:
1. Issue revise program of works. This is 1 week in delay from when we last met
2. Issue variation Order ..not just email correspondence.
3. Factory visit to Sharjah on 28.12.21 in the morning.
4. The Payment request for 454k will be assessed on site tomorrow afternoon. Please ensure DIF QS attends.
5. Please email EMAAR RDT and seek approval on the Façade. This I believe should have been already obtained such that the variation cost for it can be validated by us.”
56. On 28 December 2021 she wrote to DIF:
“Please could you instruct the team to send me the FINAL MATERIAL SCHEDULE REGISTER of ALL FINISHES (ID, JOINERY, FLOWERS ETC) along with a completed Column that clearly identifies what has been signed off by either Govind or by Client and what sign offs are outstanding.
I need this in any event today. Mark has been to the Sharjah outsourced Joinery factory and the production manager is still awaiting approval from Dilip on finishes. The production is NO FURTHER FORWARD than Marks visit some 3 weeks ago. This is a delay to the project and I hereby request your prompt co-operation in this regard.”
57. The same day, DIF delivered a number of boxes to the site containing many of the artifacts listed in Part L of the BOQ and Mr Taquet attended the factory where DIF was procuring the joinery. He found and reported to Ms Abbas that the works had not progressed since his last inspection on 28 November 2021. None of the joinery was complete or ready for installation. The partially constructed items were stored outside and had been damaged.
58. The meeting scheduled of 28 December 2021 did not take place because Ms Abbas had been in contact with someone suffering from COVID but the following day she tested negative.
59. On 29 December 2021 Ms Abbas carried out an assessment of the works. The purpose of the assessment was to determine that state of completion of the works as at 30 November 2021. DIF was invited to attend but did not do so.
Ms Abbas’s Assessment of Progress
60. Ms Abbas has set out her observations in her witness statement as follows:
“The hoarding was completed, but as is standard practice in all Emaar malls, the hoarding was to be done by Emaar's subcontractor (Shadi Makdasi) and paid for by the Tenant. Fitout contractors would not normally include this in their BOQ, as they do not perform these works. I therefore did not consider this claim appropriate to be awarded.”
I pause to note that Ms Abbas recognised in cross-examination that there were two elements to the hoarding as I have set out at paragraphs 12 to 15 above. Hoarding completion so far as DIF’s work scope was concerned was therefore 50% complete (items A1 and A2, value AED 14,820 or 1.75% by value).
“The demolition appeared complete, although the site had been left untidy and not all the debris had been cleared. The issue with the demolition works was the fact that the water feature had been improperly removed and the drain had been damaged. This was causing a back flow in the pastry area of the OPSO premises and a foul smell in the OPSO Restaurant.
The damage had been covered in screed, so the extent of the issue could not be determined without additional demolition of the works done to uncover it. The issue was urgent and potentially expensive to rectify. I therefore could not certify that the demolition aspect of the works had been satisfactorily completed to warrant the payment claimed.
As such, I determined that 10% of these works could be considered as complete and I [sic] later a notice non-conformance in relation to this matter.”
(c) Floor Finishes
“No floor finishes had been done and the screed over the fountain area was non-conforming and would have to be removed.
Tiles had been supplied to the site.
As such, I determined that 10% of these works could be considered as complete, as I made an allowance for the value of the tiles on site.”
(d) Wall Finishes
“There was no evidence whatsoever that any aspect of this work had been done. No wall cladding materials were on site, and certainly nothing installed.
As such, I determined that 0% of these works could be considered as complete.”
(e) False Ceiling
“There was no evidence whatsoever that any aspect of this work had been done. None of the related materials were on site, and no works on [sic] this nature had been carried out.
As such, I determined that 0% of these works couId be considered as complete.”
(f) Joinery Works
“None of these goods had been delivered to site.
The day prior to me carrying out my assessment of the progress payment claim, I had received videos and photos showing such goods with minimal progress, and that such works had been damaged.
No documentation, such as LPO's (“Local Purchase Order) invoices or other evidence of payment for such works had been provided.
There were some stickers applied to the back wall joinery counter showing some assessment was done of the shop drawings, but such works were not sufficient to warrant any credit towards completion.
As such, I determined that 0% of these works could be considered as complete.”
(g) Furniture Works
“None of the furniture had been delivered to the site, nor had any LPO's been provided, evidencing payment or ownership of such goods.
DIF had also not provided any:
(i) Certificates relating to the foam density and fabric rub count relating to the furniture; nor
(ii) Fire rating certificates for any of the furniture.
As such, none of the goods could be verified as being compliant with the contract.
I therefore determined that 0% of these works could be considered as complete.”
Ms Abbas accepted in cross-examination that after the inspection Fire Certificates were received but the supplier would not deliver the furniture unless paid in full.
(h) Light Fixings
“There was no evidence whatsoever that any aspect of this work had been done.
None of the goods noted in this part of the claim had been delivered to site, nor had any LPO's or other evidence of ownership or procurement of such goods been provided.
It was of course the case that 0% of the testing and commissioning of the lighting controls (referred to in K.13) had been done, as no lights had been installed at all.
As such, I determined that 0% of these works could be considered as complete”.
“The day before the determination was carried out, what appeared to be a substantial portion of the artwork was delivered to site.
I was of the view that the provision of such goods to the site warranted acknowledgement and I accepted the sum claimed. In doing this, I mistakenly referred to page 9 of the progress Payment Claim form, where a sum of AED
78,525 was noted, as opposed to the amount actually being claimed of AED 11,316 on page 8.
I note however that these items were closely inspected later on, and it was found that several items were not delivered and others were defective.”
(j) Electrical Works
“Upon inspection of the electrical works done, it was the case that only 1st fix and back boxes had been done. Wires were not yet terminated. DIF had to demonstrate what above ceiling works had been undertaken.
As such, I determined that 15% of these works could be considered as complete.”
(k) Ms Abbas did not allow the Preliminaries as sums are paid progressively with the milestone payments, and therefore do not factor into the determination of the percentage of works completed.
61. In preparing her witness statement Ms Abbas discovered her error in thinking that DIF’s claim for Artwork was AED 78,525 instead of AED 11,316. This had the effect of bringing the percentage completion as asserted by DIF in her estimation down to 46%. Ms Abbas states that had she found that the progress of the works was equal to or greater than 30% she would have advised Rafid the pay Invoice No.63 but after due allowance for the defective demolition works she assessed that there they were no more than 2% complete. Even if she had ignored the defective demolition works, allowed all of the hoarding costs and did not correct her error in the value of the artwork her assessment would still have been 16% completion.
62. Ms Abbas accepts that in a fit out contract progress can be credited for procurement of goods as long as they meet the requirements of the contract, they have all appropriate certifications and it is established that they are held specifically for the contract. In the present case DIF claimed for all the furniture but it had not been delivered to site nor approved. In fact DIF had only paid 50% of the cost of the furniture and failed to order 15 lounge chairs.
Breakdown in Relations
63. On 29 December 2021 Ms Abbas sent her comments to DIF. There was a meeting at some point. I am not sure when it took place. Ms Abbas described it in her oral evidence as involving “finger pointing“ and “blaming” and as “a slanging match”. DIF was unwilling to finish the works and Rafid was unwilling to pay in advance.
64. On 30 December 2021 Ms Abbas agreed with Mr Al Mandil and Mr Taquet that Rafid would re-tender the Project, and if DIF had not resumed the works, and a suitable replacement was ready and able to carry out the Project, they would terminate the agreement as the delay was causing too much damage and there was no sign of the issue being resolved, with ongoing rent being paid by Rafid, and no revenue generation.
65. On 3 January 2022 Ms Abbas sent a “Non-Conformance Observation Report (NCR)” to DIF. It contained the following observations:
(a) “Following removal of water fountain by DIF as part of interior fit out works removal of water fountain and backfill/screeding works by DIF, blockages/ damages incurred to the drain line connected to the Pastry Area remains unrectified as of 30.12.21.
(b) Drain line jetting conducted by TDM on 22.11.21. The same was communicated to DIF via email by Rafid Gourmet on 08.12.21
(c) Non-conforming works by DIF has resulted in backflow issues in the Pastry Area and Foul drain smell. This is strictly in breach of Food Safety and Hygiene standards required by FCA for F&B Outlets to be maintained.
(d) The Client reserves their right to pass on any fines/penalties/ damages incurred due to backflow issues which will be passed over to DIF for settlement.
(e) Backflow issue unresolved on date of this Notice of Non – Conformance.”
66. On the same day she sent an “Early Warning Notice” based on the following:
(a) “Delayed Joinery works at Sharjah factory. Finishes have been approved by the Client via email dated 05th December 2021 which has not been communicated to the Joinery factory resulting in nil progress as of 2nd factory visit undertaken by Mr Mark Taquet on 28 December 2021.
(b) Nil progress of on- site works following fountain removal and glass façade removal. Nil man power on site.
(c) Non-conforming works at water fountain, resulting in water back fill and foul drainage in the currently Operational Pastry Area across the corridor.
(d) Outstanding variation orders inclusive of cost breakdown, substantiation remain to be provided.
(e) Outstanding finishing works to Hoarding. The Client reserves their right to pass on any fines/penalties imposed by TDM or Civil Defence to DIF for non-completion of Hoarding Work finishes and leaving them in an unacceptable state given this is the main entrance corridor to the Opso Restaurant.”
67. Ms Abbas says that DIF took no action to resolve the issues. On 12 January 2022 she carried out a detailed inspection of the furniture being held at the supplier, Interior 360. This furniture had been claimed as completed in its entirety (except for one item) in the 30 November 2021 invoice with a value of AED 209,952.50. It was during this inspection that Ms Abbas discovered that 15 chairs had not been ordered with a combined value of AED 58,425. Thus the value of the loose furniture was overstated by some 25%, nor had it been paid for in full and so it was not appropriated to the contract.
68. On 17 January 2022 Ms Abbas carried out a detailed inspection of the artwork. She determined that many items had not been delivered and other were damaged or defective. This reduced her estimate of the value of artwork supplied to AED 5,640.
69. On 21 January 2022 Ms Abbas asked Mr Fadaly to hand over the loose furniture. Ms Abbas’s colleague Mini Raju sent a reminder. Instead of responding to the request, Mr Fadaly introduced Mr Sagaya (whose full name is Sagaya Raja Kuttappan) who he said would be the one to take all the formalities and the point of contact from DIF.
70. It is necessary at this point to consider Mr Sagaya’s role in these proceedings. Mr Sagaya appears from his witness statement to have been employed as a Claims Consultant by DIF to recover the amount of the interim payment. His evidence is largely inadmissible as it purports to be a legal opinion on DIF’s entitlement to the first progress payment.
71. I am somewhat mystified by what he thought was his function. He says that “I have not scrutinized the Defendant’s progress payment as it is not part of our service. However, I have generally evaluated the Progress Details to analyze whether Defendant has the right to request the progress payment as which is the main cause of the issue between the Claimant and Defendant.” This seems to me to be an internally inconsistent statement. Whatever it was intended to mean Mr Sagaya seems to have considered it to be his task to assess the value of the works both on and offsite. This amounts to unauthorised expert evidence as, unlike Ms Abbas, he was not involved in the actual administration of the works and therefore cannot give first hand evidence of fact. In fact no reliance can be placed on his assessment even if one were to overlook the absence of permission to call expert evidence as he is clearly not independent since he seems to have acted as an unlicensed legal advisor. He prepared DIF’s counterclaim which comprises not just the unpaid progress certificate but also claims for extended preliminaries and head office overheads and claims for loss of profits that may, most charitably, be described as ambitious.
72. Having said all that he did play some minor role in the factual chronology.
73. Ms Abbas repeated the request to hand over the loose furniture to Mr Sagaya on 25 January 2022 stating that without the necessary documents the furniture would be rejected. Mr Sagaya replied on 26 January 2022 that he had informed the DIF team to get the requested documents from the supplier. Ms Abbas wrote to Mr Fadaly on 27 January 2022 noting that there had been no confirmations nor any information about the furniture since 28 December 2021 which had caused delay and compromised Rafid in its commitment to EMAAR Malls LLC.
74. It was Mr Sagaya who replied the next day that:
“However, we are communicating with the supplier to obtain the fire rating certificate and other confirmation on commercial grade. Though we have already paid 50% to the supplier, we are finding difficult to get such information from them. However, we continue follow up with them and provide the documents ASA received from them.”
75. On the same day (28 January 2022) Ms Abbas wrote to put on record that the TV screens installed in the corridor were not the ones specified in contract and that given the lack of requested information and delays to date incurred on the project, Rafid was serving Notice of Termination.
76. Mr Sagaya states:
“On 28 January 2022, the Claimants’ Representative has issued the Notice of Termination of the Contract. I have found that the termination is not valid under the Contract and Law. Moreover, as the root cause of the situation was due to non-payment, I have advised Defendant to reply to it as an Invalid Termination stating the intention to give mutual consent for the termination and claim cost incurred due to wrongful termination. Thus, I have provided draft reply to Defendant, which was sent to Claimant’s Representative.”
His draft foreshadowed the counterclaim. This clearly demonstrates the inadmissibility of his evidence.
77. DIF vacated the site on 7 February 2022.
78. The works were re-tendered and let to Blue Camel Design LLC (“BCD”) for AED 994,390 who commenced work as soon as DIF had removed its tools and equipment.
79. On 18 February 2022 Mr Taquet attended the premises of Interior 360, he noted that the wood stain colour used on the tables was incorrect, and a number of the tabletops were chipped. Arrangements were made with Interior 360 for the furniture to be used by BCD.
80. Mr Taquet says that they then discovered that that DIF had only paid 50% of the sum due to Interior 360 for that furniture. I am not sure that is correct – on 28 January Mr Sagaya had told Ms Abbas that only 50% had been paid. I do not consider that anything turns on the point.
81. Rafid agreed to pay Interior 360 a total of AED 91,198.88 to secure the release of the furniture as follows:
(a) AED 20,355.22 immediately on account of the replacement table tops, as the original table-tops ordered by DIF were not accepted by Rafid: and
(b) AED 70,843.66 by way of 4 post-dated cheques.
82. BCD rectified defects caused by DIF, including the foul smell caused by the water back flow following their demolition of the water feature, completing the works in 45 days and the OPSO Café reopened on 23 March 2022.
83. The Amended Particulars of Claim is not a very illuminating document. While it pleaded the facts in detail the relief sought was for the Court to declare that the contract was terminated with effect from 28 January 2022. So much is common ground. It also claimed damages “because of the Defendant’s breach of contract” but did not identify the terms of the contract said to be breached or what is said to have constituted the breach or how the loss and damage claimed were caused thereby.
84. The Reply to the Defence spent unnecessary time criticising the pleading of the Defence while doing little to repair the defects in the Amended Particulars of Claim.
85. A proper exposition of the case appears in the Claimant’s Skeleton Argument. It is the Claimant’s case that it was not liable to pay the first progress payment because DIF had failed to achieve 30% completion. DIF was not entitled to stop works and abandon the site. Its actions amounted to a fundamental non-performance of its obligations under the Contract under Articles 77 and 86(2) of DIFC Law No. 6 of 2004 (“Contract Law”) and Rafid (not DIF as mistakenly stated at paragraph 13.2 of the Skeleton Argument) was therefore entitled to terminate the Contract pursuant to Article 86(1) and to claim full compensation for the harm sustained by DIF’s non-performance under Articles 109 and 110 of the Contract Law.
86. Rafid argues that the words “site work progress” in the payment provisions should be given their literal meaning and confined to the progress of the works actually executed on the site. In my judgment this is too narrow an interpretation, I consider that it may also include works or materials not yet brought to site if those works or materials are appropriated to the contract and property in them has passed to employer. I am reinforced in this view as matter of general interpretation by evidence of Ms Abbas who was willing to give credit for off site works on proof that they were held specifically for the contract. I am reinforced in this view in particular because it appears to have been the shared intention of the parties. Mr Fadaly certainly held that view and in his email of 29 November 2021 Mr Taquet spoke of “the 30% of works expected to date on and off site”.
87. The point is ultimately of academic interest only as I am satisfied on the evidence that neither the works on site alone, nor taken in combination with the off site works, came close to satisfying the criterion of 30% completion necessary to trigger the first progress payment. In reaching this conclusion I have regard to Mr Taquet’s evidence as a record of the state of the works. I do not consider his estimate of the percentage of completion as reliable as he is not a construction professional. I do not accept Mr Fadaly’s assessment of the percentage of completion as he was not the person who prepared Invoice No.63 or the supporting documents. No evidence was adduced from that person and it was not disclosed how the percentage of completion was determined. It was however clear that there were serious over-estimates in the Invoice. I have found Mr Sagaya’s evidence as to the percentage completion inadmissible. It follows that the best evidence I have is that of Ms Abbas.
88. DIF criticises her evidence in the following respects:
(a) DIF was never invited to any meetings to carry out an assessment – this is untrue, see paragraph 59 above;
(b) She never replied to any payment requests – this is irrelevant but also untrue, see paragraph 55 above;
(c) She did not understand that the external hoarding was to be paid for directly by Rafid - she did pick up the error and corrected it in her evidence;
(d) She did not know that the crack on the floor was going to be repaired and DIF had delivered tiles to the site – the fact is that it had not be repaired by January 2022 and she did give credit of the tiles on site;
(e) DIF has not received any NCR in relation to the screed works – this is untrue, see paragraph 65(a) above;
(f) She did not go to the joinery factory and relied on the pictures and video taken Mr Taquet. That is correct but even Mr Khateib accepts that the joinery works only reached 60% completion;
(g) With regard to the loose furniture, she said in her assessment that DIF had not provided fire certificates whereas they were provided on 11 February 2022 – it follows that what Ms Abbas said was correct;
(h) DIF checked with Dubai Mall guidelines and based on their experience the Mall does not require any kind of certificate. No evidence was given to support this assertion; and
(i) She was never told about any design change or had discissions with DIF – this is untrue, see paragraphs 53 and 55 above.
89. On the basis of these criticisms (which are demonstrably unfounded) DIF submits that Ms Abbas’s evidence unrealistic, without conviction and should be “squashed and struck off completely”. I have no hesitation in rejecting DIF’s submissions and accepting the evidence of Ms Abbas in its entirety without qualification. In my judgment it is beyond argument that she did a proper professional job in assessing the state of the completion of the works as at 29 December 2021 subject to the minor corrections she readily accepted in her witness statement.
90. I therefore find as a fact that as at 30 November 2021 DIF had not completed 30% of the works whether on site or off site and so was not entitled to the payment claimed in Invoice No.63. The undisputed evidence is that after 17 November 2021 DIF ceased any meaningful works and did not resume execution of the contract before termination on 28 January 2022. While DIFC law permits a party to suspend performance when the other party is in default (see Articles 79(1) and 80(4) of the Contract Law) since Rafid was not obliged to pay Invoice No.63 DIF had no right to suspend performance. Indeed DIF had already ceased performance before Invoice No.63 was even issued.
91. The Claimant refers me to Article 86 of the Contract Law:
“86. Right to terminate the contract
(1) A party may terminate the contract where the failure of the other party to perform an obligation under the contract amounts to a fundamental non-performance.
(2) In determining whether a failure to perform an obligation amounts to a fundamental non- performance regard shall be had, in particular, to whether:
(a) the non-performance substantially deprives the aggrieved party of what it was entitled to expect under the contract;
(b) strict compliance with the obligation which has not been performed is of essence under the contract;
(c) the non-performance is intentional or reckless;
(d) the non-performance gives the aggrieved party reason to believe that it cannot rely on the other party’s future performance.”
92. Article 77 of the Contract Law defines non-performance as “failure by a party to perform any one or more of its obligations under the contract, including defective performance or late performance”.
93. I am satisfied on the evidence that DIF was guilty of fundamental non-performance of the contract from 17 November 2021 in that DIF’s cessation of work was intentional, substantially deprived Rafid of what it was entitled to expect under the contract and gave Rafid reason to believe that it could not rely on DIF’s future performance – Mr Taquet said in his oral evidence that by January 2022 “all confidence had gone”. DIF’s work on any view was late and, at least so far as the damage to the drainage was concerned, defective.
94. The Claimant therefore succeeds on the claim.
95. DIF’s counterclaim is based on breach of the obligation in the contract to make timely payment as set out at paragraph 9(a) above on the basis that Rafid failed to pay Invoice No.63 when it fell due.
96. As I have held that the conditions for payment of Invoice No.63 were never satisfied and consequently Rafid never came under an obligation to pay the same, the counterclaim must fail.
97. During the course of argument I raised the issue of liquidated damages in the light of the provision of the contract:
“In case there is delayed in the performance of works, we shall be liable for paying an amount of AED 5,000 late payment fee per each day of delay from the date of handover (15th of July 2021).”
98. The parties did not purse the issue and consequently it is unnecessary to consider the matter further.
99. The Claimant relies on Articles 109 and 110 of the Contract Law:
“109. Right to damages
Any non-performance gives the aggrieved party a right to damages either exclusively or in conjunction with any other remedies except where the non-performance is excused under this Law.
110. Full compensation
The aggrieved party is entitled to full compensation for harm sustained as a result of the non- performance. Such harm includes both any loss which it suffered and any gain of which it was deprived, taking into account any gain to the aggrieved party resulting from its avoidance of cost or harm.”
100. The Claimant claims damages under 4 heads:
(a) AED 483,620 being the difference between the Contract Amount, and the actual cost to procure the Works;
(b) AED 208,635, being the rent payable for the Site for the period starting on 31 December 2021 until 22 March 2022 (i.e., the date the Project was supposed to have been completed, and the date the Project was ultimately completed (Delay Period));
(c) AED 187,600 being for loss of profits for the Delay Period; and
(d) AED 151,873 being salaries paid by the Claimant to its staff during the Delay Period.
101. The first head is calculated as follows:
(a) 20% initial payment to DIF – AED 178,500 (170,000 + VAT); plus
(b) AED 11,912.25 (11,345 + VAT) paid to hoarding contractor; plus
(c) AED 91,198 paid to Interior 360 for release of the loose furniture (although Mr Taquet refers to a Tax Invoice dated 8 August 2021 [sic] at Exhibit MGT-36, it not produced. I therefore assume that the figure of AED 91,198 includes VAT and net of VAT would be AED 86,638); plus
(d) AED 1,044,109.50 (994,390 + VAT) paid to BCD; plus
(e) AED 13,650 (13,000 + VAT) paid to N51 to tender and manage the project until 15 February 2022; plus
(f) AED 36,750 (35,000 +VAT) paid to N51 as a management fee from 16 February to 15 March 2022; less
(g) The original contract price of AED 892,500 (850,000 + VAT).
102. I do not consider that the VAT inclusive figures should be used to calculate this head of claim as Rafid will already have set off what it has paid by way of input tax against its output tax payments, accordingly the appropriate figure will be AED 460,373.
103. I can deal with the other heads of claim more compendiously. The Claimant’s submissions show that the claim for loss of profits is calculated by deducting rent, salaries and other costs from projected revenue. However DIF did not challenge the figures either in cross-examining Mr Taquet or in submissions. Notwithstanding, there is no evidence to support the projected revenue between 31 December 2021 and 22 March 2022, Mr Taquet only produced figures for 23 to 28 March 2022 (inclusive) without estimating the lost revenue.
104. Mr Taquet does not produce any evidence of the rent payable in respect of the café during the delay period.
105. He does produce some evidence of staff costs. I would have expected evidence of wage slips in respect of each employee during the relevant period to have been produced, but in the absence of any challenge I will accept the Claimant’s claim in the sum of AED 151,873.
106. The Claimant’s claim succeeds and the Claimant is entitled to damages in the sum of AED 612,246.
107. The Defendant’s counterclaim is dismissed.
108. The parties are directed serve submissions on interest and costs within 14 days of being notified of this judgment.