Musaab Tag Elsir Abdelsalam v Expresso Telecom Group [2021] DIFC CA 011 (20 December 2021)

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Cite as: [2021] DIFC CA 11, [2021] DIFC CA 011

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Musaab Tag Elsir Abdelsalam v Expresso Telecom Group [2021] DIFC CA 011

December 20, 2021 Court of Appeal - Judgments

Claim No: CA 011/2021

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 APPEAL

BEFORE CHIEF JUSTICE ZAKI AMI, JUSTICE ROBERT FRENCH AND JUSTICE WAYNE MARTIN

BETWEEN

MUSAAB TAG ELSIR ABDELSALAM

Appellant

and

EXPRESSO TELECOM GROUP

Respondent


JUDGMENT


Hearing :16 November 2021
Counsel :Mr Roger Bowden instructed by Ahmed Bin Dhahi Advocates & Legal Consultants for the Appellant.
Mr Syed Mujtaba Hussain of Emirates Legal FZE for the Respondent.
Judgment :20 December 2021

UPONhearing Counsel for the Appellant and Counsel for the Respondent at the hearing on 16 November 2021

AND UPONreading the submissions and relevant documents on the Court file

IT IS HEREBY ORDERED THAT:

1. The appeal is allowed.

2. Orders 1 and 2 of the Orders of the Court of First Instance made on 29 August 2021 are set aside.

3. Each Party is to bear its own costs of this appeal.

4. The Appellant has leave to file, within 14 days, further amended particulars of claim, the timetable for further pleadings to be as directed by the Registrar.

5. The Appellant is to pay the Respondent’s costs thrown away by reason of the further amendment.

Issued by:
Nour Hineidi
Registrar
Date of issue: 20 December 2021
Time: 2pm

JUDGMENT

CHIEF JUSTICE ZAKI AZMI, JUSTICE ROBERT FRENCH AND JUSTICE WAYNE MARTIN IN AGREEMENT:

Introduction

1. This appeal raises a question of statutory construction. It concerns a repealing statute which preserves rights and obligations under the repealed law and introduces a shorter limitation period for the commencement of proceedings under the new law. The question is whether the new shorter limitation period applies retrospectively to proceedings already commenced within time under the repealed law? The Primary Judge held that it did and dismissed the Appellant’s claim. In our opinion, the new limitation period does not so apply. That being so, the appeal must be allowed.

Procedural History

2. On 20 March 2019, the Appellant filed a claim in the Dubai International Financial Centre (“DIFC”) Court of First Instance against the Respondent. The claim was for compensation for alleged breaches by the Respondent of a series of three employment agreements entered into with the Appellant. The Appellant is a British citizen. The Respondent is a company incorporated and registered in the DIFC.

3. In Particulars of Claim filed on 5 May 2019, the Appellant said he had been employed by the Respondent since 2008 in various roles under three distinct Employment Agreements, each for a fixed term of two years. The first commenced from 1 November 2008. The second, entered into prior to the expiration of the first, was said to be effective from 1 August 2010 for a term of two years, ending on 31 July 2012. The third agreement was effective as from 1 August 2012 and was also said to have been for a fixed term expiring on 31 July 2014. The Appellant’s employment with the Respondent terminated on that date.

4. The Appellant alleged in paragraph 17 of his Particulars of Claim that the Respondent was in breach of contractual obligations relating to “Remuneration, Term of Appointment, End of Service Gratuity and Notice to Terminate Employee’s Service or Resignation in the Agreements” and was in default of statutory obligations under Articles 18, 19, 64 and 65 of what he described as “DIFC Employment Law No. 4 of 2005 (amended as Law No. 6 of 2018).”

5. The remedies claimed were declarations that the Respondent had breached contractual obligations and provisions of the DIFC Employment Law No 4 of 2005 (Amended by Law No 6 of 2018), an order for payment of the actual claim value of AED1,305,502, damages and compensation pursuant to Articles 8 and 9 of the Law of Damages and Remedies DIFC Law No 7 of 2005 and the current value of holiday air tickets not consumed since 2008, and interest. The Appellant also sought orders for the imposition of fines and penalties under the DIFC Employment Law No 4 of 2005 (As amended by Law No 6 of 2018).

6. The Respondent filed a Statement of Defence on 2 June 2019. It was not in dispute that the Appellant and the Respondent had entered into three Employment Agreements. The Respondent set out a summary of its defences, which included the following elements:

(1) The DIFC Law No 4 of 2005 had not been amended by Law No 6 of 2018 as the 2018 amendment had been published in draft, but not enacted.

(2) The DIFC Law No 4 of 2005 did not apply to the Appellant’s case as its application was limited to circumstances in which the employer is an establishment having a place of business within the DIFC and the employee is based within or ordinarily works within or from the DIFC. The Appellant was in fact employed by another company Sudatel in Sudan. The Appellant had already claimed entitlements against the Sudanese company.

(3) Most of the claims made by the Appellant were time barred pursuant to Article 38 of the DIFC Law No. 10 of 2004 (“DIFC Court Law”). That time limit was six years after the date of the events that gave rise to the proceedings.

7. It is unnecessary for present purposes to refer to other elements of the Respondent’s defence going to the factual merits of the claim.

8. The Appellant filed a Reply on 23 June 2019. He acknowledged that he had been mistaken in invoking Law No. 6 of 2018. He sought to amend his statutory claim to claims under Articles 18, 19 and 62 of DIFC Law No 4 of 2005 (Amended as Law No. 3 of 2012). He noted that the Ruler had in fact enacted a new DIFC Employment Law, Law No. 2 of 2019, on 30 May 2019 to come into force 90 days after its enactment.

9. The Appellant said that his employment with Sudatel in Sudan had commenced in September 2014. His claim against Sudatel arose under his Employment Agreement with that company which had commenced on 1 September 2014.

10. The draft Law No. 6 of 2018 has never been enacted. A new Employment Law, DIFC Law No. 2 of 2019, enacted in May 2019, came into force on 28 August 2019. That is the current employment law applicable in the DIFC. It was not in force when the Appellant submitted his claim.

11. On 30 June 2019, the Respondent applied for immediate judgment dismissing the Appellant’s claim and for the Appellant’s Particulars of Claim to be struck out.1The Appellant applied, on 7 August 2019, for permission to amend his Particulars of Claim.2

12. A memorandum accompanying the Amendment Application stated that the Appellant sought to:

“2.1 delete all references as to DIFC Employment Law No. 4 of 2005 (amended as Law No. 6 of 2018) and replace the same with DIFC Employment Law No. 4 of 2005 (amended as Law No. 3 of 2012) — such deletion maybe allowed on the ground that the claim has been made under the correct context of the DIFC Employment Law, however, the same was wrongly written as an amended version of the law which has not yet assumed force, therefore, at deletion of these references, this shall further allow the claim of the Claimant to be in place, without causing prejudice to the Defendant.

2.2 further particularise the provisions stated as Articles 18, 19, 64 and 65 of the DIFC Employment Law No. 4 of 2005 (amended as Law No. 6 of 2018) to Articles 18, 19 and 62 of the DIFC Employment Law No. 4 of 2005 (amended as Law No 3 of 2012)”

13. A hearing of both the Immediate Judgment Application and the Amendment Application was conducted before HE Justice Ali Al Madhani on 29 September 2019. That hearing resulted in the dismissal of the Respondent’s Immediate Judgment Application with costs and the granting of the Appellant’s Amendment Application, with no order as to costs. The Amendment Order was made on 10 March 2020. It was in the following terms:

“1. The Defendant’s Immediate Judgment Application is dismissed.

2. The Defendant is to pay the Claimant’s costs of the Immediate Judgment Application.

3. The Claimant’s Amendment Application is granted.

4. The Claimant is granted 20 days to amend his Particulars of Claim.

5. No order as to costs for the Amendment Application.”

14. Amended Particulars of Claim were filed on 29 March 2020. Despite what had been foreshadowed in the Amendment Application, they alleged breaches of the DIFC Employment Law No. 4 of 2005 (Amended as Employment Law No. 2 of 2019). At paragraph 10 of the Amended Particulars, the Appellant alleged that:

“… the Employment Law No. 2 of 2019 should be applied to this claim pursuant to Article 1(1) (2) (3) (4) (5) of the Employment Law No. 2 of 2019.”

15. The Appellant also alleged that the Respondent had breached Articles 18 and 19 of the 2019 Employment Law. He alleged breach of the Respondent’s contractual obligations relating to remuneration, term of appointment, end of service gratuity and notice of termination. He also invoked an entitlement to damages and compensation under Articles 8 and 9 of the Law of Damages and Remedies, DIFC Law No. 7 of 2005. He further alleged that the Respondent was liable for fines and penalties pursuant to Article 68 of the DIFC Employment Law No 2 of 2019.

16. As appears from this summary of what appeared in the Amended Particulars of Claim filed on 29 March 2020, they were quite inconsistent with the amendment foreshadowed in the Amendment Application and in respect of which the Amendment Order was made.

17. A Consent Order was made on 10 June 2020 allowing the Appellant 28 days from 20 May 2020 to file further Amended Particulars of Claim pursuant to Part 18 of the Rules of the DIFC Courts. It required the Respondent to file objections within 28 days from the date of receipt of the Amended Particulars of Claim. The further Amended Particulars of Claim filed on 17 June 2020 showed the amendments marked up in red. They continued to invoke provisions of DIFC Employment Law No. 4 of 2005 (Amended as Employment Law No 2. of 2019).

18. In support of his assertion of jurisdiction on the part of the DIFC Court, the Appellant stated that the Employment Law No. 2 of 2019 should be applied to the claim pursuant to Article 1(1), (2), (3), (4) and (5) of that Law.3The amount of the claim was AED1,141,850.

19. At paragraph 18 of the marked up Amended Particulars of Claim filed on 17 June 2020, the Appellant stated:

“18. The Defendant, therefore, is in breach of his contractual obligations pertaining to provisions relating to Remuneration, Term of Appointment, End of Service Gratuity and Notice to Terminate Employee’s Service or Resignation in the Agreements, and, in default of PART 3 (Protection of Remuneration Articles 18, 19, 66(10) of DIFC Employment Law No 4 of 2005, (amended as Law No. 2 of 2019). [sic]

In addition to that, the Claimant is entitled to damages and compensation arising out of all of the aforementioned breaches of contractual obligations as per laws of contract, by the Defendant, in accordance with DIFC Law of Damages and Remedies Law No. 7 of 2005, Articles 8&9.” [sic]

The reference in paragraph 18 to Articles 18 and 19 was once again a reference to those Articles in the DIFC Employment Law No 2 of 2019 (“2019 Employment Law”). The reference to Article 66(10) appears to have been intended to have been a reference to Article 66(1) of that Law.

20. Declaratory relief was sought including a declaration that the Respondent had contravened provisions of Articles 18, 19 and 66(1) of DIFC Employment Law No. 4 of 2005 (Amended as Law No. 2 of 2019) (“2005 Employment Law”). The Appellant also claimed damages and compensation pursuant to Articles 8 and 9 of the Law of Damages and Remedies, DIFC Law No. 7 of 2005 and for an order that the Respondent be made liable for fines and penalties as per Articles 8 and 9 of the 2019 Employment Law.

21. On 15 July 2020, the Respondent filed a Statement of its objections to the Appellant’s further Amended Particulars of 16 June 2020. In its objections it made the following points:

(1) The applicable law in force on 20 March 2019, when the Appellant first submitted his claim, was DIFC Law No. 4 of 2005 (Amended as Law No. 3 of 2012).

(2) The draft Law of 2018 never became law. The current law, referred to as DIFC Law No. 2 of 2019, came into force on 28 August 2019. It was not in force when the Appellant submitted his claim.

(3) The amendments sought by the Appellant in his application of 7 August 2019 involved the substitution of references to the DIFC Employment Law No. 4 of 2005 (Amended as Law No. 6 of 2018) with DIFC Employment Law No. 4 of 2005 (Amended as Law No. 3 of 2012).

(4) The Order of Justice Al Madhani permitting the Appellant to amend his Particulars of Claim was based on the provisions of the law then applicable and not on the basis of the current law. The Amended Particulars of Claim had once again been wrongly filed on the basis of the current law and not on the basis of the then applicable law.

(5) The further Amended Particulars of Claim filed on 16 June 2020, which invoked the 2019 law, were not in conformity with the scope of the amendments allowed by the Amendment Order. The Appellant had not sought leave to file its amended claim on the basis of the current 2019 Law.

(6) The rights and obligations of an employer are significantly different in the two laws.

(7) The further Amended Particulars of Claim should be struck out as all amendments were beyond the scope of the Amendment Order.

(8) The current law does not have retrospective application. The relevant law is the law which was applicable at the time that the Appellant filed his case.

(9) The Respondent submitted that all of the Appellant’s Amended Particulars of Claim should be struck out, including on the ground that when the Particulars of Claim were filed the law in force was the Employment Law 2012.

22. The Appellant responded to the Respondent’s objections on 4 August 2020. He asserted, inter alia, that:

(1) The Appellant’s original points of claim and amended points of claim included the same factual events which satisfy the elements of the substantive law and constitute the essential ingredients of his claim.

(2) The Amendment Order of 10 March 2020 allowed him to change references from the draft Employment Law to the in force Employment Law and to change references from Articles 18, 19, 64 and 65 to the relevant in force provisions — referring to paragraph 4 of page 4 of the Schedule of Reasons to the Amendment Order.

(3) The Amendment Order did not determine exactly what the in force Employment Law and the in force provisions were. The Appellant contended that it had to be the current law, Employment Law No. 2 of 2019.

23. On 8 October 2020, the Respondent made an application under RDC 4.16(3) read with RDC 24.1(1)(a) to strike out the Appellant’s Particulars of Claim and for an Immediate Judgment dismissing the claim in its entirety. The application was based on the grounds that:

(1) the Amended Particulars of Claim were contrary to the scope of the permitted amendments under the Amendment Order;

(2) the claim was filed under a law not in force at the time when it was made and so does not disclose any cause of action;

(3) even if Law No 2. of 2019 does apply, then the Appellant’s claim is barred by limitation as Article 10 of Law No 2. of 2019 provides for a six-month limitation period.

24. The Appellant filed an Answer on 1 November 2020. That answer reiterated the Appellant’s complaints about the Respondent’s alleged contractual breaches and breaches of the 2005 Employment Law. He contended, inter alia, that any legal proceeding under the previous law, such as his claim, is deemed to be done pursuant to the current in force Employment Law. That was because of the operation of Article 1 of Employment Law No. 2 of 2019.

25. His Excellency Justice Ali Al Madhani heard the application on 27 January 2021 and delivered judgment on 29 August 2021 with orders in the following terms:

“1. The Immediate Judgment Application is granted.

2. Judgment is entered against the Claimant and the Claim is dismissed.

3. The Claimant shall pay the Defendant its costs of the Immediate Judgment Application, on the standard basis, to be assessed by the Registrar if not agreed.

4. The Claimant is granted permission to appeal this judgment if so advised.”

Statutory Framework

26. It is necessary to outline briefly the sequence of Employment Laws relevant to this case.

Employment Law DIFC Law No. 4 of 2005

27. This Law contained provisions relating to the employer’s obligations to the employee including the following:

(1)Article 16— requiring an employer to pay all wages owing to an employee within seven days after the employer or employee terminated the employment.

(2)Article 17— prohibiting deductions from an employee’s wages except under certain conditions.

(3)Article 60— providing for an entitlement to a Gratuity Payment on termination of employment for an employee who completed continuous employment of one year or more.

(4)Article 80— this Article imposed an obligation on an employer who failed to pay wages or another amount to an employee, to pay interest at the rate prescribed in the Regulations. There appears to have been no equivalent to the penalty provision which appeared in the proposed 2018 Law.

Employment Law Amendment Law DIFC Law No. 3 of 2012

28. This Law amended but did not repeal the DIFC Law No. 4 of 2005. It amended some provisions and renumbered several. It included the following provisions:

Article 18:

“18. Payment where the employment is terminated

(1) An employer shall pay all wages and any other amount owing to an employee within fourteen (14) days after the employer or employee terminates the employment.

(2) If an employer fails to pay wages or any other amount owing to an employee in accordance with Article 18(1), the employer shall pay the employee a penalty equivalent to the last daily wage for each day the employer is in arrears.”

Article 19— This Article prohibited employers from deducting money from an employee’s wages except under certain conditions. It is not necessary to set out the full text of the Article here.

Article 62:

“62. End of service gratuity

(1) Subject to Article 62(5), and (6), an employee who completes continuous employment of one (1) year or more is entitled to a gratuity payment at the termination of the employee’s employment.

(2) The gratuity payment shall be calculated as follows:

(a) twenty one (21) days’ basic wage for each year of the first five (5) years of service.

(b) thirty (30) days’ basic wage for each additional year of service provided that the total of the gratuity shall not exceed the wages of two (2) years of service.

The daily rate for the employee’s basic wage shall be calculated based on the number of days in the year. The employer may deduct from the gratuity any amounts owed to the employer by the employee.

(3) Where the termination occurs prior to the end of any full year of employment, the gratuity payment shall be calculated on a proportionate basis.

(4) An employee is not entitled to a gratuity payment where the employee has been terminated for cause as defined in Article 59(4).

(5) Where an employer has established a pension scheme for his employees, he shall provide in writing to the employee, the option to choose between participating in the pension scheme or receiving the end of service gratuity payment.

(6) Where an employee has received a document under Article 62(5) he shall expressly state his choice in writing and submit it to the employer.”

29. These were the three Articles relied upon by the Appellant in the Reply filed on 13 June 2019 in which he foreshadowed seeking leave to amend Particulars of Claim to invoke them. These were the Articles he sought to rely upon in his Amendment Application of 7 August 2019. At the time of that Application, the Employment Law, DIFC Law No. 2 of 2019 had been enacted, but had not come into force. It came into force on 28 August 2019.

The proposed but unenacted Employment Law, DIFC Law No. 6 of 2018

30. In his initial Particulars of Claim, the Appellant cited Articles 18, 19, 64 and 65 of what he described as “the DIFC Employment Law No. 4 of 2005 (amended as Law No. 6 of 2018)”. The 2018 Law would have repealed and replaced DIFC Law No. 4 of 2005. Articles 18, 19, 64 and 65 cited in the first Particulars of Claim, were Articles of the proposed 2018 Law. In brief summary they covered the following:

(1)Article 18 — payment where employment is terminated.This Article of the proposed 2018 Law would have required an employer to pay to an employee “all remuneration, the Gratuity Payment and all accrued Vacation Leave not taken within 14 days after the termination date” subject to a prorating of wages where the termination date fell within a pay period.

Article 18(2) would have provided for a penalty payable by the employer to the employee equal to the employee’s daily wage for each day the employer was in arrears with its payment obligations under Article 18(1).

Under Article 18(3) the penalty liability was subject to limitation, reduction or waiver as set out in Article 18(3).

(2)Article 19— this Article imposed a prohibition against deduction from an employee’s remuneration unless certain conditions were met.

(3)Article 64 — Gratuity Payment.This Article would have provided for a Gratuity Payment at the termination of an employee’s employment.

(4)Article 65 — General contravention.This Article would have been a general contravention provision imposing liability or a fine on the employer who contravened the law.

Employment Law DIFC Law No. 2 of 2019

31. DIFC Law No 2. of 2019, known as the Employment Law, repealed the Employment Law 2005. Article 1 provided for that repeal and for transitional provisions in the following terms:

“1. Title and repeal

(1) This Employment Law 2019, repeals and replaces the Employment Law 2005 (DIFC Law No. 4 of 2005), as it was in force immediately prior to the commencement of this Law (the “Previous Law”), and may be cited as the “Employment Law 2019” or “this Law”.

(2) Except where otherwise provided in this Law, anything done or omitted to be done pursuant to or for the purposes of the Previous Law is deemed to be done or omitted to be done pursuant to or for the purposes of this Law.

(3) Without limiting the generality of Article 1(2), and subject only to Articles 1(4), 10 and 61(2), the repeal and replacement under Article 1(1) shall not affect:

(a) any right, remedy, debt or obligation accrued to or incurred by any person; or

(b) any legal proceeding commenced or to be commenced, in respect of any such right, remedy, debt or obligation,

under the Previous Law, and any such legal proceeding must be instituted, continued or enforced, including any penalty, fine or forfeiture, under this Law without prejudice to any right, remedy, debt or obligation which has accrued or incurred prior to the commencement of this Law.

(4) Where there is no equivalent provision in this Law to a provision in the Previous Law, the relevant provision in the Previous Law is deemed to survive the repeal and replacement under Article 1(1), until such time as necessary for the purposes of any legal proceeding specified in Article 1(3)(b). The fact that a provision in this Law reduces or extinguishes rights in the Previous Law does not prevent it from being an equivalent provision.”

32. Article 5 provided that the 2019 Law was enacted on the date specified in the Enactment Notice. Article 6 provided that the Law came into force “on the date ninety (90) days following the date specified in the Enactment Notice.” It is not in dispute that the Law came into effect on 28 August 2019.

33. Article 10 contained a limitation period in the following terms:

“10. Limitation Period

Subject to Article 20(2) and Article 61(2), a Court shall not consider a claim under this Law unless it is presented to the court either during an Employee’s employment with an Employer or not later than six (6) months after the relevant Employee’s Termination Date.”

34. Articles 18 and 19, cited by the Appellant, fell into Part 3 under the heading“PROTECTION OF REMUNERATION”and specified respectively time limits for the making of remuneration payments to employees and the making of payments following termination. Article 66 appears in Part 10“TERMINATION OF EMPLOYMENT”. It provided for Gratuity Payments to be made to employees upon termination of employment.

35. Article 67 provided for fines and penalties for contraventions of the law. It also conferred a jurisdiction on the Court to order penalties or orders for compensation to be payable to an affected employee.

36. Articles 18, 19, 66 and 67 of the DIFC Employment Law No 2 of 2019 may be seen to have their ancestry in Articles 16, 17, 60 and 80 of the DIFC Employment Law No 4 of 2005 and Articles 18, 19 and 62 of the 2005 Law, as amended by the 2012 Amending Law.

Court Law DIFC Law No 10 of 2004

37. The DIFC Court Law 2004 provides, in Article 38:

“38. Limitation on proceedings

Subject to any other DIFC Law, a proceeding must not be commenced more than 6 years after the date of the events that give rise to the proceedings.”

That limitation, it appears, would have applied to proceedings commenced under the 2005 Employment Law, as amended by the 2012 Employment Law Amendment Law.

Law of Damages and Remedies DIFC Law No 7 of 2005

38. Part 2 of this Law deals with“DAMAGES UNDER THE LAW OF CONTRACT”and provides in Articles 7 and 8:

“7. Application

This Part applies to any contract to which the Law of Contract applies.

8. 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 the Law of Contract.”

Articles 9 and 10 deal with the entitlement of an aggrieved party to full compensation and the measure of damages.

39. Article 22 imposes a time limitation:

“22. Limitation

(1) An action for breach of any contract shall be commenced within six (6) years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.

A cause of action arises when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach except where the breach constitutes or is combined with fraud, in which event a cause of action arises when the aggrieved party discovers the breach.”

40. Part 4 of the Law of Damages and Remedies deals with remedies. Article 34 provides:

“34. Remedies stipulated under this Law

Where this Law provides that a person may claim or otherwise has a right to or is entitled to compensation, damages, restitution, specific performance, or any other relief or remedy, the Court may, on application made by such a person, make orders accordingly, together with any other order as the Court sees fit, except where the making of any particular order may be excluded under this Law.”

41. Article 35 makes provision for “Other Orders” which may be made “[w]here a person commits a breach of any requirement, duty or obligation which is imposed under any DIFC Law …”. These include orders for damages and compensation. There is also provision for declaratory relief in Articles 35(1)(e) and 37.

42. It may be noted that Article 35 provides remedies of damages and compensation for a breach of any requirement, duty or obligation imposed under any DIFC Law. That would presumably extend to a breach of any obligation imposed by the 2019 Employment Law.

Contract Law DIFC Law No 6 of 2004

43. The DIFC Contract Law on its face applies to contracts generally, albeit it would no doubt be read subject to any inconsistent provision of a later law dealing with a specific class of contract — in this case the Employment Law, DIFC Law No. 2 of 2019.

44. Part 11 of the Contract Law deals with damages in terms similar to Part 2 of the Law of Damages and Remedies. Article 109 provides:

“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.”

45. Article 110 provides for “Full compensation” to the aggrieved party and Article 111 specifies the measure of damages.

46. Article 123 imposes a limitation period of six years as follows:

“123. Limitation

(1) An action for breach of any contract must be commenced within six years after the cause of action has accrued or in the case of fraud, when the aggrieved party becomes aware of the fraud. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.

(2) Subject to Article 123(1), a cause of action occurs when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach.”

The Judgment Appealed From

47. His Excellency Justice Ali Al Madhani characterised the Respondent’s Immediate Judgment Application as being made on the primary basis that the Appellant had relied upon the 2019 Employment Law rather than the 2005 Employment Law, which was in force during the currency of the Contracts and at the time of their respective expiries. The Respondent had argued that the Appellant was required to rely upon the 2005 Employment Law as the 2019 Employment Law did not have retrospective effect.

48. The Appellant contended that the 2019 Employment Law applied retrospectively. Before Justice Al Madhani he relied primarily on Article 1 of that Law for the proposition that the rights and obligations created by the 2019 Law applied retrospectively. The contention was not sustainable, but it was that contention which attracted consideration of the retrospective application of the limitation provision under Article 10.

49. Justice Al Madhani foreshadowed that if he concluded that the 2019 Employment Law did not have retrospective effect then the Amended Particulars of Claim, like the Particulars of Claim, would be:

“… devoid of the law relevant to Mr Abdelsalam and Expresso’s dispute, and Mr Abdelsalam’s request to amend his POC again will need to be considered, along with the considerations ancillary to this request, including whether the proposed amendments have a real prospect of success … On the other hand, if I conclude that the Current Employment Law does apply retrospectively, the scope of the limitation period applicable to claims under the Current Employment Law as well as the procedural background of this case will need to be examined in order to determine whether Mr Abdelsalam’s claim is made out of time.”

That conclusion, with respect, was erroneous as Article 1(3) preserved accrued rights and obligations under the 2005 Employment Law.

50. The Judge then turned to the question whether the 2019 Employment Law had retrospective effect. It appears that neither the Appellant nor the Respondent made particularly substantial submissions on that question, although the Appellant did invoke Article 1 and, in particular, paragraphs (1) and (2) of that Article.

51. Justice Al Madhani found Article 1 not very easy to follow. He noted that there was no evidence that, since the 2019 Employment Law came into force that Article 1 of the Law had been invoked or had been the subject of analysis in any prior proceedings.

52. Justice Al Madhani referred to Article 1(3) and then noted its language which pulled in different directions in terms of retrospectivity. He then turned to the construction of Article 1 and came to the conclusion that the 2019 Employment Law had retrospective effect. He observed at paragraph 14 of his judgment:

“The only circumstance in which the Previous Employment Law may be said to survive its replacement in some way is where, for the purpose of particular proceedings, the Court deems that a particular provision survives in order to preserve a right, remedy, debt or obligation that would have existed, but for the Current Employment Law, by operation of the Previous Employment Law and which the Current Employment Law does not itself deal with by means of an “equivalent provision”. In other words, the Previous Employment Law will only ever supplement the Current Employment Law by legal construct of the Court to the extent required, while the latter legislation is the only extant DIFC employment law properly so called.”

53. His Excellency held that it followed from this conclusion that the Appellant was correct to rely on the 2019 Employment Law in the Amended Particulars of Claim. It followed from that that the Respondent’s primary case in the Immediate Judgment Application had to be dismissed. In this, with respect, His Excellency erred. But it was through that error that the retrospective operation of the new time limitation under Article 10 fell for consideration.

54. The 2005 Employment Law did not provide for a limitation period specific to claims made under that Law. That meant that the limitation period of Article 38 of DIFC Court Law ending six years after the date of the cause of action applied to proceedings under that Law. On the other hand, the 2019 Employment Law provided in Article 10 for a limitation period of six months after the relevant employee’s termination date. Plainly, the Appellant had not brought his claim within six months of termination of any of the contracts.

55. The Respondent had submitted that if the Court found that the 2019 Employment Law applied retrospectively to the present dispute, it should go on to find that the Appellant’s claim was time barred by operation of Article 10 of the 2019 Employment Law. The Respondent had submitted that the limitation period for the first contract expired on 28 February 2011, for the second contract on 31 January 2013, and for the third contract on 31 January 2015. The Appellant’s claim was filed on 20 March 2019. Thus, the Respondent submitted, the Appellant’s claim was time barred under the 2019 Employment Law and had no prospect of success.

56. The Appellant had argued that Article 10 of the 2019 Employment Law only concerned new claims yet to be brought before the Court rather than claims filed before the 2019 Employment Law came into force.

57. His Excellency held that the Appellant’s construction of Article 10 was unsustainable. He held that unless Article 10 applied to claims already filed at the time when the 2019 Employment Law came into force, it served no purpose at all. The Court could only decline to consider a claim under Article 10 if it had been filed. If a prospective claim had been filed, then Article 10 could not be engaged.

58. As to the Appellant’s proposition that Article 10 did not apply to claims filed before the 2019 Employment Law came into force, that proposition ran contrary to Article 1 of the 2019 Employment Law. Article 1 was “subject to Article 10”. In other words, any legal proceedings commenced or to be commenced in respect of any right, remedy, debt or obligation accrued to or incurred by any person under the 2005 Employment Law were subject to the limitation period provided by Article 10 of the 2019 Employment Law. It followed that Article 10 necessarily applied to cases filed prior to the commencement of the 2019 Employment Law.

59. For the preceding reasons, the Judge held that the Appellant’s claim was time barred pursuant to Article 10 and that he therefore had no real prospect of succeeding on the claim.

60. Notwithstanding his conclusion, the Judge was of the view that the limitation period in Article 10 as he had interpreted and applied it in accordance with his construction of Article 1, was very harsh. It would apparently debar a claimant from continuing a claim originally made under the 2005 Employment Law but “transferred” to governance by the 2019 Employment Law notwithstanding that it was filed well in advance of the expiration of the limitation period in Article 38 of the DIFC Court Law but more than six months after the claimant employee’s termination. For that reason he granted the Appellant permission to appeal the judgment on the basis that there was a compelling reason why an appeal should be heard.

61. The question is whether the Appellant now can rely, as he seeks to do, upon causes of action arising under the 2005 Employment Law and/or the 2005 Employment Law as amended by the 2012 Law. That depends upon whether the new limitation period in Article 10 of the 2019 Employment Law applies to these proceedings in so far as they invoke or rely upon the 2005 and 2012 Laws. As appears from the preceding, the argument on the appeal has taken a different direction from that which was put to the Primary Judge.

Contentions

62. The construction of Article 1(3) read with Article 10 is central to the resolution of this appeal. The Appellant contended that Article 1 of the 2019 Employment Law had the evident purpose of saving claims commenced under the 2005 Employment Law before the coming into force of the 2019 Employment Law and that Article 10 of that Law should apply only to proceedings under the 2005 Law commenced after the coming into force of the 2019 Employment Law.

63. The Appellant further submitted that if this Court were of the opinion that the law applicable to his claims was the Employment Law No 4 of 2005 (including that Law as amended in 2012), he should have leave to amend his Particulars of Claim accordingly. That would be in substance a reversion to the foreshadowed reliance upon the 2005 Employment Law which was mentioned in the Appellant’s Reply of 13 June 2019. In that connection he referred to Justice Al Madhani’s observation that “an incorrect reference to law does not invalidate proceedings and is no reason to strike out a claim.” As the Court has already noted, the provisions of the 2005 Employment Law analogous to the Articles cited in the Appellant’s misguided reliance upon the proposed but unenacted DIFC Law No 6 of 2018, were Articles 16, 17, 60 and 80 of the 2005 Employment Law. The Articles of the 2005 Employment Law, as amended by the 2012 Law, which the Appellant cited in his Reply and his Amendment Application, were Articles 18, 19 and 62.

64. The Respondent contended that the Judge had correctly construed Articles 1 and 10 of the 2019 Employment Law. The language of Article 1(3) was said to have only one meaning, namely that the survival of rights under the 2005 Employment Law are subject to the provisions of Article 1(4), 1(5), 10 and 61(2). The language is not open to interpretation no matter how unreasonable, unjust or oppressive the result may seem.

65. The Respondent’s contentions upon the construction of Article 1 may be summarised, by reference to its skeleton argument, as follows:

(1) Article 1(1) is a repealing provision but the subsequent provisions of Article 1 provide certain circumstances in which the 2005 Employment Law shall continue to apply subject to certain conditions.

(2) Article 1(2) provides for the transfer of causes of action which have arisen under the 2005 Employment Law and deems them to have arisen under the 2019 Employment Law. Thus, acts or omissions done under the 2005 Employment Law which may have given rise to a cause of action under that law, shall be deemed to be acts and omissions done under the 2019 Employment Law.

(3) Article 1(3) has the effect that any right, remedy, debt or obligation that has accrued or incurred under the 2005 Employment Law or any legal proceeding commenced or to be commenced in respect of any such right, remedy, debt or obligation shall survive under the 2019 Employment Law and “… must be instituted, continued or enforced under the Current Law”.

(4) However, Article 1(3) is subject to the provisions of Articles 1(4) and 1(5), Article 10 and Article 61(2). The legislative intention leaves no room for ambiguity. Article 1(3) in unequivocal and explicit terms states that the applicability of the “survival clause” contained in Article 1(3) will be subject to the limitation clause provided in Article 10.

(5) A “subject to clause …” creates a priority of provisions and puts the reader on notice that there is another clause that takes priority over the clause in which it appears.

(6) The location of the “subject to” provision at the beginning of Article 1(3) clearly indicates that the Articles to which it refers will take priority over and supercede Article 1(3). The application of Article 1(3) is contingent upon the conditions stipulated in Article 10.

(7) The 2005 Employment Law did not provide for a limitation period particular to the claims made under that Law, so the limitation period ending six years after the date of the cause of action prescribed under Article 38 of the DIFC Court Law, would apply to all such claims.

(8) The limitation provision under Article 10 however, provides that the Court shall not consider a claim unless it is brought to the Court within six months of the relevant employee’s termination date.

(9) The priority of Article 10 over Article 1(3) therefore has the effect that any legal proceeding, whether already commenced or yet to be commenced under the 2005 Law, is subject to the limitation provided under Article 10 of the 2019 Employment Law.

(10) The Appellant was dismissed from his employment on 31 July 2014. The claim was filed on 20 March 2019. That was more than five years after his employment under the most recent employment agreement was terminated.

66. The Respondent then went on to refer to the purpose of the short limitation period provided in Article 10 and its application to proceedings commenced under the 2005 Employment Law. The Respondent pointed out that under the 2005 Employment Law there were no limitation provisions. In many cases, employees would deliberately and knowingly not file their claims under the 2005 Employment Law in an attempt to accrue the penalty liable to be paid by the employer to the employee.

67. The legislature was said to have been well aware of the shortcomings of the 2005 Employment Law and its abuse by employees. It was in this context that the legislature was said to have introduced the limitation provision under Article 10 of the 2019 Employment Law. Not only was the limitation provision introduced in the 2019 Employment Law, but was given priority over Article 1(3).

68. The Respondent went on to deal with other propositions advanced by the Appellant and put some general submissions relating to the limits of judicial interpretation of statutes. Reference was made to the oft-repeated caution against courts construing a statute so as effectively to redraft it away from its plain meaning. In this respect reference was made toFrontline Development Partners Limited v Asif Hakim Adil.(2016) DIFC CA-006" data-toggle="tooltip" data-placement="top">4

69. The Respondent also addressed the merits of the proposed appeal to support its proposition that the appeal “:does not deserve to be allowed in the facts and circumstances of this case”. As to that, it suffices to say that the Court is not concerned on this appeal with its prospects of success on the merits. The question before the Court is whether the Appellant’s claim should have been dismissed on the basis that it was out of time by virtue of Article 10 of the 2019 Employment Law.

Consideration and Conclusion

70. The Appellant’s Particulars of Claim asserted facts constituting his alleged causes of action under provisions of the unenacted DIFC Law No 6 of 2018, although he expressly referred to 2005 Employment Law as amended by the 2018 Law.

71. The facts asserted may have given rise to entitlements under the 2005 Employment Law by reference to Articles 16, 17, 60 and 80 of that Law or by reference to Articles 18, 19 and 62 following the 2012 amendments. The Appellant may be taken therefore to have commenced a proceeding involving causes of action based upon alleged conduct by the Respondent said to be in contravention of the Respondent’s statutory obligations under the 2005 Law. The Appellant quoted the wrong law — indeed, a non-existent law. His proceeding can nevertheless properly be regarded as a proceeding asserting rights and duties and breaches under analogous provisions of the 2005 Employment Law. The question is whether Article 1(3) of the 2019 Employment Law, read with Article 10, bars him from continuing with that proceeding? If it does not, it will of course be necessary for the Appellant to amend his pleading so that it clearly specifies the way in which the alleged conduct of the Respondent is said to have given rise to causes of action under the relevant provisions of the 2005 Employment Law as amended in 2012.

72. Article 1(3) of the 2019 Employment Law is a species of saving provision commonly found in the Interpretation Acts of many national common law jurisdictions. Thus, section 16 of theInterpretation Act 1978(UK) provides that where an Act repeals an enactment, the repeal does not, unless the contrary intention appears, affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactment. Nor does it affect any legal proceeding or remedy in respect of any such right, privilege, obligation or liability. Any such legal proceeding or remedy may be instituted, continued or enforced as if the repealing Act had not been passed.

73. Similar provision is made in section 7(2)(c) and (e) of theActs Interpretation Act 1901(Cth) of the Commonwealth of Australia, section 43(c) and (e) of theInterpretation Act 1985(Canada), section 18(1) of theInterpretation Act 1999(NZ) and sections 6(c) and (e) of theGeneral Clauses Act 1897(India).

74. It was not suggested in argument that the law-making power of the Ruler in relation to the DIFC does not extend to the power to enact retroactive legislation, including laws which, by repeal of a pre-existing law, might extinguish rights or liabilities accrued under it. However, the Courts of the DIFC would be slow to construe a saving provision such as Article 1(3) so narrowly as to have that effect unless the language of the saving provision required a narrow construction. That would accord with the approach of the DIFC Courts which has been described as “developing DIFC Law and shaping principles taken from various common law traditions”.5

75. As a former Chief Justice of Australia, Sir Owen Dixon, said in 1957 in the leading case ofMaxwell v Murphy:

“The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events.”6

The present case is concerned with the effect of a change in the limitation period made by a repealing statute on proceedings brought in relation to accrued rights and obligations under the previous law which are protected by a saving provision in the repealing statute. Limitation laws are commonly regarded as procedural laws. The common law presumption against retrospectivity stated by Sir Owen Dixon did not necessarily extend to procedural laws regulating the manner in which rights and liabilities fixed by reference to past facts, matters or events were to be enforced. Thus, inChang Jeeng v Nuffield (Australia) Pty Ltd7it was held that the presumption did not apply against an enlargement of the limitation period which was effected by the repealing statute.

76. In the second edition of Professor G E Dal Pont’s text,Law of Limitation8it is accepted that, unlike amendments to the substantive law, statutory changes to practice and procedure are traditionally assumed to operate retrospectively. InRepublic of Costa Rica v Erlanger,[1876] 3 Ch D 62." data-toggle="tooltip" data-placement="top">9cited by Dal Pont, Mellish LJ observed that:

“[n]o suitor has any vested interest in the course of procedure, nor any right to complain if during the litigation the procedure is changed, provided of course, that no injustice is done.”[1876] 3 Ch D 62, 69." data-toggle="tooltip" data-placement="top">10

That qualification had nothing to say about the case in which the repealing statute introduced a new and shorter limitation period. It had nothing to say about the case in which it is argued that the shortened limitation period applies retroactively to proceedings commenced under the repealed legislation and otherwise protected by a saving provision. Nor does it have anything to say about the case in which an enlarged limitation period may effectively give rise to new rights of action.

77. In Chang Jeeng, Dixon CJ was concerned with a case in which the repealing statute enlarged the limitation period. He had accepted inMaxwell v Murphythat sometimes a procedural statute could affect vested rights adversely. He said:

“unless the language used plainly manifests in express terms or by clear implication a contrary intention – (a) A statute divesting vested rights is to be construed as prospective. (b) A statute, merely procedural, is to be construed as retrospective. (c) A statute which, while procedural in its character, affects vested rights adversely is to be construed as prospective.”11

78. Dal Pont observed that the recognition of category (c) suggested that a simple binary procedural-substantive distinction would not adequately address questions of retrospectivity. In relation to limitation cases he observed:

“…while it is common to classify statutes of limitation as procedural – they do, after all involve a matter going to procedure – there is a more compelling case, under the intermediate category noted above, to view them as substantive when it comes to the question of retrospectivity. That this is so, at least on occasions where retrospectivity would function to alter the substantive position of one of the parties, appears from the following remarks of Williams J inMaxwell v Murphy:

Two classes of case can be considered. An existing statute of limitation may be altered by enlarging or abridging the time within which proceedings may be instituted. If the time is enlarged whilst a person is still within time under the existing law to institute a cause of action the statute might well be classed as procedural. Similarly if the time is abridged whilst such person is still left with time within which to institute a cause of action, the abridgment might again be classed as procedural. But if the time is enlarged when the person is out of time to institute a cause of action so as to enable the action to be brought within the new time or is abridged so as to deprive him of time within which to institute it whilst he still has time to do so, very different considerations could arise. A cause of action which can be enforced is a very different thing to a cause of action the remedy for which is barred by lapse of time. Statutes which enable a person to enforce a cause of action which was then barred or provide a bar to an existing cause of action by abridging the time for its institution could hardly be described as merely procedural. They would affect substantive rights.”[1983] 1 AC 553, 562–3" data-toggle="tooltip" data-placement="top">12

79. It follows from the preceding analysis that, if an abridgment of a limitation period would have a substantive effect on rights if read retrospectively, it should not be so read without clear words.

80. On the Respondent’s construction of Article 1(3), read with Article 10, it would bar a proceeding commenced under the 2005 Employment Law and commenced within the general time limit of six years for which Article 38 of the DIFC Court Law and/or Article 35 of the Law of Damages and Remedies provided.

81. That construction would apply to any proceedings commenced under the 2005 Employment Law more than six months after an applicant’s date of termination even if commenced two or three years before the coming into force of the 2019 Employment Law.

82. The proposition that Article 10 applies retrospectively to proceedings commenced under the old law, however long before the enactment of the new Law, has only to be stated to demonstrate the harshness of its operation, remarked upon by the Primary Judge. That operation borders uon the arbitrary and the absurd. The question is whether the language of Article 1(3) of the 2019 Employment Law, read with Article 10, requires such a construction. The answer to that question is no.

83. Article 1(3) is to be read subject to Article 10. The question is what aspect of Article 1(3) is subject to Article 10? It cannot be Article 1(3)(a) because Article 10 does not in terms apply to rights, remedies, debts or obligations accrued or incurred by any person under the 2005 Employment Law. What operation then does Article 10 have consistent with the language of Article 1(3)? Plainly, Article 10 can operate in respect of that class of legal proceeding referred to in Article 1(3)(b) as “[a]ny legal proceeding … to be commenced, in respect of any such right, remedy, debt or obligation.” Article 10 thus imposes a bar against consideration by the Court of any claim commenced after the coming into force of the 2019 Employment Law, which is brought more than six months after the relevant employee’s termination date. Any employee who had not commenced a legal proceeding under the 2005 Employment Law, within six months of termination of his or her employment at the time that the 2019 Employment Law came into effect, would not be able to have that claim considered by a court. The evident purpose of the provision is to pick up employees who may be, as it were, resting on their rights in order to gain the benefit of a claim for penalties which might accrue against the employer following termination of the employment.

84. It is an entirely different matter to bar any proceeding commenced before the coming into force of the 2019 Employment Law regardless of how long before the coming into force of that law it had been commenced. That would pick up and bar proceedings commenced in a timely fashion — for example proceedings commenced within a year of termination of employment at a time when the relevant limitation period was six years.

85. In our opinion the Respondent’s construction is untenable and must be rejected.

86. We should also add that the Appellant’s claim as initiated appears to have included causes of action which did not depend upon a breach of the employer’s statutory obligations whether under the 2005 Employment Law or otherwise. It is difficult therefore to see on what basis the whole claim was dismissed at first instance.

87. The Respondent put written submissions to the Court to the effect that the Appellant could not succeed because his claims for the most part would be time barred even under the former six year limitation period. Those submissions raise questions of law and fact which cannot be resolved on this appeal and may be inappropriate to be determined as a preliminary issue in the CFI.

88. In our opinion the appeal should be allowed. It is clear that initially the Appellant was asserting a cause of action for breaches of, or arising out of, the 2005 Employment Law. It is the asserted facts that define his cause of action, rather than the particular law which he invokes. He should therefore have leave to amend his Particulars of Claim in order to invoke such provisions of the 2005 Employment Law as support the relief which he claims by reference to the facts which he has alleged.

89. It can fairly be said that the Appellant, acting through his advisors, has been the author of his own misfortunes. He initially invoked an unenacted law. He then relied upon a misconceived belief, at first instance, that rights and obligations created under the 2019 Law had retrospective application. For these reasons, in our opinion, the costs order in the Court of First Instance should stand. The Appellant should have an opportunity now to amend his Particulars of Claim to make clear the statutory provisions upon which he relies. The Respondent should have any costs thrown away by reason of that amendment. There should be no order as to the costs of the appeal.


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