Claim No: SCT 471/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE MAHA AL MHEIRI
|Hearing :||6 February 2023|
|Further Submissions :||4 May 2023|
|Judgment :||19 May 2023|
JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI
UPON the Claim Form being filed on 27 December 2022
AND UPON a hearing having been held before H.E. Justice Maha Al Mheiri on 6 February 2023, with the Claimant’s and the Defendant’s representatives attending
AND UPON a further hearing having been held before H.E. Justice Maha Al Mheiri on 4 May 2023, with an expert, and the Claimant’s and the Defendant’s representatives attending
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant a total sum of AED 235,037.20.
2. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 11,751.86.
SCT Judge and Assistant Registrar
Date: 19 May 2023
1. The Claimant is Makur, (the “Claimant”), an individual located in Dubai, the UAE.
2. The Defendant is Motla (the “Defendant”), a construction company located in Dubai, the UAE.
3. The Claimant and the Defendant entered into a contract dated 5 July 2022 for the Defendant to complete fit-out and installation works at the Claimant’s villa located in Dubai in the value of AED 434,369.25 (the “Contract”). The scope of work agreed between the parties in the Contract was defined in the bill of quantity (the “BOQ”), and set out the agreed finishes, which was approved by the Claimant.
4. The fit-out works to be completed were specifically for six 6 bathrooms in the Claimant’s villa for a duration of 60 working days. A breakdown of the work is set out below:
|Waste Disposal and Premise Preparation||15,600|
|Approval (insurance, permit and drawings)||22,500|
|3D Designs for Bathrooms|
|TOTAL CONTRACT AMOUNT||434,369.25|
5. As per the Contract, it was agreed that the terms of payments would include a 75% down payment in the amount of AED 325,776.94 and 25% payment upon completion of the project in the amount of AED 108,592.31.
6. The parties are in dispute with respect to the works completed by the Defendant in and the delay in finishing such work. The Claimant hired a third party to continue the works that the Defendant failed to achieve.
7. On 27 December 2022, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking the sum of AED 434,369.25 allegedly owed to the Claimant by the Defendant.
8. The matter was listed for a Consultation before SCT Judge Hayley Norton on 12 January 2023, however, the parties failed to reach a settlement.
9. The matter was called for a hearing before me on 6 February 2023, with representatives appearing on behalf of both parties (the “Hearing”).
10. On 8 February 2023, I gave post-hearing directions, requesting that the parties provide additional documents in relation to specific points within the claims, being the following issues:
(a) The BOQ that was agreed by the parties;
(b) The percentage of the works completed by the Defendant;
(c) The works done by the third party appointed by the Claimant to finish the project;
(d) Do the invoices provided by the Defendant in relation to the sanitary and accessories of the bathrooms match the criteria agreed in the BOQ?;
(e) How much of the sanitary and accessories of the bathrooms are under the custody of the Defendant and how much of those are installed in the villa;
(f) The works done to the water pump in the Villa;
(g) The damages done to the villa by the Defendant due to his negligence if any; and
(h) The invoices paid by the Claimant in relation to the sanitary and accessories of the bathrooms bought to be installed by the third party.
11. The parties submitted a joint expert report on 9 March 2023 (the “Expert Report”), following which a further hearing was listed on 4 May 2023 to discuss the Expert Report.
12. Upon reviewing all of the documentation on the Court file to date, I hereby give my judgment.
13. On 27 December 2022, the Claimant filed a claim in the SCT seeking recovery of amounts paid to the Defendant in the amount of AED 434,369.25 due to the Defendant’s alleged failure to complete the works promised within the agreed timeline.
14. The Defendant rejected the Claimant’s claims. The Claimant claims that the Defendant’s scope of work was not completed and he also incurred further losses by deploying third parties to finish the work.
15. The Defendant argues that the list of items in the BOQ were performed to a satisfactory standard and it was required to stop working as a result of the Claimant not transferring the remainder of the Contract amount. The works performed by the Defendant were rejected by the Claimant in their entirety, and other work was found to be defective and required a third party to fix it.
16. On the Defendant’s account, it submits that it fulfilled its part of the Contract and certainly, enough to warrant payment for its services and the work that was performed towards the project. Such is evidenced by the work presented on file and to the Claimant.
17. In response, the Claimant states that the amounts paid to the Defendant in respect of the Contract greatly exceed the value and quality of the work delivered.
18. The parties reiterated their arguments at the Hearing, and I ordered that an Expert Report be provided to value the parties’ work and assess the damages and the third party works that were made to the project.
19. The Contract in question is signed by both parties on 5 July 2022. Its terms are not disputed by the parties. The dispute is governed by the DIFC Law of Contract and the relevant case law and principles concerning a breach of contract. Neither party has disputed the jurisdiction of the DIFC Courts, as stated in the Contract under Clause 20 and 21:
“20. The contract is governed by and construed, performed, and enforced in all respects in accordance with the laws of Dubai International Financial Center.
21. If any dispute arises under or in connection with the contract, either party may notify the dispute to the other party in writing. Within 28 calendar days (unless another period is agreed between the parties) of either party notifying the other party of a dispute, the parties shall seek to amicably resolve the dispute. If any dispute cannot be amicably resolved within 28 calendar days, the dispute shall be finally and conclusively settled by the courts of Dubai International Financial Centre.”
20. The Expert Report was made in consideration of the signed contract, site visits, and documents provided by the parties. Where additional information was required, both parties were contacted. All the additional information was documented and where related to the case, is presented in the Expert Report. Independent investigation which includes direct contact with the suppliers of the submitted invoices and site visit of the villa were also carried out to further supplement the information needed to bring forth the requirements of the court.
21. The BOQ was prepared by the Defendant and priced accordingly. Therefore, I find that the drawings and BOQ are the Defendant’s responsibility.
22. The remuneration set out in the Contract is for payment via a lump sum subject to variations. However, the terms of the Contract provide that the Claimant shall pay to the Defendant, the allocated cost of any item.
23. The Expert’s Report provided is based on the BOQ items and the parties’ comments on the BOQ. The Expert carried out site visits, reviewed the submitted documents by the Defendant, the Claimant’s submission of the BOQ, as well as the parties’ submissions.
24. During the site visit, the Expert verified that some of the invoices submitted by the Claimant were not related to the bathroom works or related to items that were not installed in the bathroom. Therefore, the total amount of eligible invoices paid by the Claimant amounted to AED 118,348.26.
25. The Defendant argues that it is entitled to payment for the supplies that are located in its warehouse without any invoice trail and such invoices should be considered when calculating the Defendant’s expenses. The Court does not agree with this argument. The Court finds the Expert Report to be more reliable, meaning any sanitary item without an invoice should not be considered as part of the Defendant’s expenses.
26. The Expert selected by the parties has reviewed the BOQ thoroughly and the work that was completed by the Defendant as well as the work completed by the third party to rectify the work. The Expert Report included a list of items that were listed in the BOQ which were discussed in depth. The concerned Expert also factored in the monetary value of the work completed by the third party to either fix or finish the work.
27. On the 7 March 2023, the expert attended a site visit at the Claimant’s villa to assess the work status of the bathrooms. Setting the quality of work by the third-party contractor aside, it was confirmed that the bathrooms are completed. This means that up to the moment when the Defendant left the site, the third party contractor had completed 54.11% of the work.
28. The total percentage of works the Defendant has carried out is 45.89%. This percentage takes into consideration the invoices of the materials and services purchased by the Defendant in relation to the bathroom fit out works as set in the signed Schedule of Works of BOQ.
29. The Court has thoroughly reviewed the parties’ oral submissions presented at the Hearing, read the evidence on the case file, and reviewed the Expert Report and is satisfied with the calculations that were provided within the Expert Report.
30. The parties agreed that the Claimant paid the Defendant the total sum of AED 434,369.25 in respect of the works to be completed within his villa. In light of my finding that the Defendant has completed 45.89% of the works, I find that the Defendant should rightfully have been paid the sum of AED 199,332.05 (i.e., 45.89% of AED 434,369.25), and the remaining balance of AED 235,037.20 shall be returned to the Claimant.
31. Accordingly, I find that the Defendant shall pay the Claimant a total sum of AED 235,037.20.
32. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 11,751.86.