Claim No. SCT 429/2020
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE NASSIR AL NASSER
|Hearing :||20 June 2021|
|Further Submissions :||21 June 2021|
|Judgment :||1 July 2021|
JUDGMENT OF H.E. JUSTICE NASSIR AL NASSER
UPONthis Claim being filed on 19 November 2020
AND UPONthe Defendant filing a SCT Claim against the Claimant under SCT-007-2021 on 10 January 2021
AND UPONthe Order dated 8 March 2021 consolidating the Claims SCT-429-2020 and SCT-007-2021 under the name and title of SCT-429-2020
AND UPONthe Defendant filing a defence on 14 June 2021
AND UPONa Consultation being held before SCT Judge Hayley Norton on 24 March 2021
AND UPONthe parties failing to reach a settlement at the Consultation
AND UPONa hearing having been listed before H.E. Justice Nassir Al Nasser on 20 June 2021, with the Claimant’s representative and the Defendant in attendance
AND UPONreading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the sum of AED 46,504.53 plus interest at the rate of 9% per annum from the date of this judgment until the date of full payment.
2. The Defendant shall pay the Claimant the court fee in the sum of AED 2,325.22.
3. The Claims brought by the Defendant under SCT-007-2021 are dismissed.
4. Each party shall bear its own costs in regards to the claim brought by the Defendant in SCT-007-2021.
Nassir Al Nasser
Date of issue: 1 July 2021
1. Lajesh (the “Claimant”) is a housing management company with offices located in Dubai.
2. Laasya (the “Defendant”) is the owner of a unit situated in a building under the Claimant’s management (the “Unit”).
Background and the Preceding History
3. The underlying dispute arises over alleged unpaid service charges for the Unit owned by the Defendant.
4. On 19 November 2020, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming unpaid service charges from January 2018 to 5 August 2020 in the amount of AED 45,208.
5. The Defendant filed an SCT Claim against the Claimant SCT-007-2021 on 10 January 2021 making various claims against the Defendant. Both claims were then consolidated pursuant to an order dated 8 March 2021 under the name and title of SCT-429-2020.
6. On 1 June 2021, the Claimant amended the claim adding additional sums accrued during the months from August 2020 to 11 April 2021 in the sum of AED 62,371.20.
7. On 14 June 2021, the Defendant filed a defence through the eRegistry system.
8. The parties met for a Consultation with SCT Judge Hayley Norton on 24 March 2021 but were unable to reach a settlement. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a Hearing held on 20 June 2021.
9. The Claimant contends that service charges owed by the Defendant had fallen due from January 2018, in the sum of AED 62,371.20, as of 11 April 2021.
10. The Claimant submits that it had carried out its obligations in accordance with Article 10 of the Strata Title Law (DIFC Law No. 5 of 2007) by submitting its Strata Management statement for the building where the Unit is located, Lavam, by way of letter dated 28 June 2016. The Strata Management Statement included the Claimant’s by-laws. Therefore, pursuant to the Strata Law and the Lavam Strata Management statement, the Defendant is required to pay contributions, in the form of service charges and fees towards the administration, maintenance, management and control of the common property at Lavam.
11. The dispute arising between the parties relates to the Defendant’s alleged failure to pay the service charges in relation to the Unit. The Claimant contends that despite a number of follow-ups to the Defendant, she has failed to pay the service charges.
12. The Lavam – Strata Management Statement, states as follows:
a. “The body corporate may from time to time levy the owners’ contributions in respect of lots to raise amounts that the body corporate decides as necessary to meet anticipated expenditure.
b. The contributions are to be proportionate to the unit entitlements of the lots.
c. The contributions are paid towards the administration, maintenance, management and control of the common property and are not to be used for any maintenance and/or replacement of assets, fixtures and fitting inside the individual lots for which the responsibility falls exclusively on the lot owner.
d. A contribution falls due for payment on a date fixed by the body corporate. The body corporate must give the owner at least 30 days’ notice of the amount and when its due.
e. the owner or the prospective owner of the lot as at the due date for payment is liable for the contribution, and any person who later becomes an owner before the contribution is paid becomes jointly and severally liable for payment.
f. If a contribution for which the owner or other person is liable under paragraph is not paid, the owner or other person is taken to have failed to comply with a requirement of the law for as long as the contribution remains unpaid.
g. Interest accrues on overdue contributions calculated on a daily basis at the rate of 12% per annum.
h. The building manager may at the end of each quarter send legal notices through an independent law firm for contributions owed by defaulters. The cost of such legal notices is to be borne by the defaulting lot owners and to be added to their statement of account.”
13. The Claim Form specifies that the amount due is in the sum of AED 62,371.20 which relates to the service charges from January 2018 to 11 April 2021. Following the hearing before me the Claimant provided the Court with an updated Statement of Account which reflects that the Defendant made some payments towards the amounts owed and the remaining outstanding balance is AED 52,638.04.
14. The Defendant submits that, prior to the Claimant filing a claim at the DIFC Courts, the parties had been in verbal contact to settle the amicably. The Defendant alleges that she had provided the Claimant postdated cheques following the settlement agreement, in the sum of AED 2,716 per month starting on 1 May 2020 to 1 March 2021 in the total sum of AED 29,876.
15. In addition, the Defendant further submits that the amounts charged by the Claimant were done without any justification or prior approval from the DIFC Authority under “reserve fund”.
16. The Defendant also requested that the Claimant provide proof of the authorised service charge rate to collect the amounts owed.
17. The Defendant also filed a claim under the Claim No. SCT-007-2021, whereby she sets out her claims against the Claimant. For the avoidance of confusion, I will refer to these claims as a counterclaim (the “Counterclaim”).
18. The Defendant filed the Counterclaim claiming the sum of AED 45,208.12. The Defendant submits that the Facility Management Company makes it difficult on the Owners/Tenants and their subcontractors to perform such work at the building’s premises unless they have contracted a specific vendor nominated by the Facility Management Company.
19. The Defendant submits that, due to the alleged ‘questionable’ and ‘faulty’ preventative maintenance procedure by the Claimant, an overflow of the existing roof tanks occurred around 25 to 30 May 2020. The Defendant submits that the issue had not been addressed in sufficient timing to avoid water wastage as well as extensive damage to the Unit. The Defendant continues that, instead, the facility management staff and the Claimant did not inform their owners/tenants about the excess water that caused damage to the units in an alleged attempt to hide the incident and avoid paying for caused damages. As a result, the Defendant alleges that the water became absorbed into the particle boards and flooring, which caused the floor to rot and decay as well as permanently stained walls.
20. In response to the Counterclaim, the Claimant alleges that the Defendant’s claim is not supported by evidence such as an expert report or a specialist opinion. The Defendant claims damages but failed to provide the Courts with evidence of the damages suffered.
21. First and foremost, the relevant property is located in the DIFC, therefore, it is clear and undisputed that the DIFC Courts have jurisdiction to decide this matter. As the claim value is less than AED 500,000, this claim is properly before the SCT of the DIFC Courts.
22. As per the Lavam Strata Management Statement approved by the DIFC Authority, contributions towards the payment of Annual Community Charges as set by the Master Developer “Dubai International Financial Centre Authority”, are paid by the “Principle Body Corporate” and billed to each body corporate (residential, retail, office) who in turn bills each lot owner based on its unit’s entitlement in the relevant body corporate where the lot is located.
23. The calculations of the contributions are made in accordance with the Strata Management Statement approved by the DIFC Authority.
24. The Claimant provided the Defendant a statement of Account which reflects the amounts due on the Defendant’s Unit. In response, the Defendant argues that she had entered into a verbal agreement with the Claimant for a lower amount and the cheques provided support her argument.
25. However, I am not satisfied that the parties have entered into a verbal agreement. In addition, I am not satisfied with the Defendant’s argument that the cheques provided support her allegation of a settlement. The Defendant had an obligation to pay the Claimant as per the Law, and the cheques provided by her can also be considered as partial payments towards the service charges.
26. The Claimant’s latest statement of Account reflects that the outstanding amount is AED 52,638.04 from January 2018 to 11 April 2021.
27. The Defendant submits that the Claimant charges “reserve funds” without providing any justification on what basis the amount has been deducted. At the Hearing listed before me, the Claimant failed to provide a justification. Therefore, I am of the view of deducting the “reserve fund” charges as the Claimant failed to provide evidence to support its claim for charges deducted from the “reserve fund”.
28. Therefore, the total amount owed to the Claimant without the “reserve fund” is AED 49,736.01.
29. The Defendant also argues that the Claimant has claimed legal charges in the sum of AED 2,373.44 without providing any supportive evidence.
30. The Claimant has not provided any supporting document to support this claim for legal charges, therefore, I dismiss the Claimant’s claim for legal charges.
31. Therefore, the total charges without the “reserve fund” and “legal charges” is AED 47,362.57.
32. The Claimant also claimed penalty fees in the sum of AED 858.04, which the Defendant argues that the Claimant is not entitled to unless it is ordered by the DIFC Courts.
33. The Claimant again failed to support its claims for a “penalty fee”. Therefore, I shall dismiss the Claimant’s claim for said penalty fee in the sum of AED 858.04.
34. Therefore, the total charges without the reserve fund, legal charges and the penalty fee is AED 46,504.53.
35. The remaining AED 46,504.53 is the service charges in accordance with the Lavam– Strata Management statement.
36. The Claimant submitted that the service charges were charged in accordance with Dubai Law no. (6) of 2019 concerning Ownership of jointly owned Real Property. However, this Law does not apply in the DIFC, where the law governing such relationships is the Strata Title Law (DIFC Law No. 5 of 2007).
37. It is evident that the DIFC Authority in 2016 approved the Lavam – Strata Management Statement. Therefore, I am of the view that the Claimant is entitled to charge the Defendant service charges as per the Statement of Account provided and as per the calculation made in this Judgment.
38. I find that the Claimant is entitled to the sum of AED 46,504.53 of service charges to be paid by the Defendant.
39. In relation to the cheques provided by the Defendant, the Claimant is entitled to keep the cheques and cash them according to the dates of the cheques to recover the payments it is entitled to under the Statement of Account.
40. In relation to the Counterclaim, I find that the Defendant failed to provide supportive evidence of the damages she allegedly suffered and therefore, I shall dismiss the Counterclaim accordingly.
41. For the above-mentioned reasons, the Defendant is liable to pay the sum of AED 46,504.53 plus interest at the rate of 9% per annum from the date of this judgment until the date of full payment, in addition to the amount of AED 2,325.22 as Court fees.
42. The Counterclaim shall be dismissed.
43. Each party shall bear its own costs in regards to the claim brought by the Defendant in SCT-007-2021.