Claim No. SCT 313/2021
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 SCT JUDGE DELVIN SUMO
|Hearing :||8 February 2022|
|Judgment :||16 February 2022|
JUDGMENT OF SCT JUDGE DELVIN SUMO
UPONthe Claim Form being filed on 25 October 2021
AND UPONa Hearing having been listed before SCT Judge Delvin Sumo on 8 February 2022 with the Claimant’s representative in attendance and the Defendant failing to appear although served notice of the Claim
AND UPONreviewing all documents submitted on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the sum of AED 195,609.13 (the “Amount”).
2. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the sum of AED 9,780.45.
3. In the event the Defendant fails to comply with Paragraph 1 within 21 days from the date of this Order, interest at the rate of 9% per annum, pursuant to Practice Direction No 4 of 2017 (Interest on Judgments) will accrue on the Amount from the date of filing this Claim until the date of full payment.
4. There be no order as to costs.
Ayesha Bin Kalban
SCT Deputy Registrar
Date of Issue: 16 February 2022
1. The Claimant is Mahendran (hereafter “the Claimant”), a Law firm registered in DIFC, Dubai, UAE.
2. The Defendant is Mahfuz (hereafter “the Defendant”), an individual residing in Riyadh, Saudi Arabia.
Background and the Preceding History
3. The underlying dispute arises over alleged unpaid invoices for legal services and the scope of work set out in the letter of engagement dated 8 October 2019 (the “Agreement”) confirmed between the parties through an email dated 14 October 2019.
4. On 25 October 2021, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming the sum of AED 195,609.13 to be paid to the Claimant by the Defendant for legal services rendered to him.
5. On 22 November 2021, the Defendant filed an acknowledgment of service setting out his intention to contest the jurisdiction of the DIFC Courts.
6. On 27 December 2021, a jurisdiction hearing was held before H.E. Justice Nassir Al Nasser, pursuant to which he determined that the DIFC Courts have jurisdiction to hear and determine this Claim (the “Jurisdiction Order”).
7. The matter was called for a Consultation before SCT Judge Ayman Mahmoud Saey on 20 January 2022. Although both of the parties were in attendance, they failed to reach a settlement.
8. In accordance with the rules and the procedures of the SCT, the matter was referred to me for determination, pursuant to a hearing held on 8 February 2022 (the “Hearing”). After reviewing all documents and evidence submitted on the Court file, I give my judgment below.
9. On 14 October 2019, the parties entered into an Agreement whereby the Defendant agreed to retain the services of the Claimant to provide specific legal services relating a family law matter concerning divorce and custody proceedings in the UAE (the “Services”).
10. Pursuant to Article 4 of the Agreement, the Claimant charged the Defendant a professional fee (the “Fees”) to perform the Services as set out below:
“We will calculate our fees on a time-spent basis and by reference to an hourly charging rate. Our hourly rates in AED for the fee earners currently allocated to this engagement are as follows…”.
11. The Parties agreed to the following payment plan contained in the terms of the Agreement (the “Payment Plan”):
“We will invoice you monthly unless otherwise agreed. If you have any queries on any invoice, please raise them with the partner or senior lawyer responsible for the particular matter within 14 days”.
12. In total, the Claimant issued to the Defendant the following 6 invoices for payment towards the Services provided by the Claimant:
(a) Invoice No. 001, dated 31 October 202019 in the amount of AED 242,994.40;
(b) Invoice No. 002, dated 30 November 2019 in the amount of AED 36,206.63;
(c) Invoice No. 003, dated 31 December 2019 in the amount of AED 6,151.95;
(d) Invoice No. 004, dated 31 January 2020 in the amount of AED 2,586.15;
(e) Invoice No. 005, dated 29 February 2020 in the amount AED 1,470; and
(f) Invoice No. 006, dated 31 March 2020 in the amount AED 1,050.
13. Pursuant to the terms of the Agreement, the parties agreed to the following payment method (the “Payment Method”):
“We require that our invoices be paid no later than 30 days after the date they are issued. The responsibility for payment will be as set out in our Matter Confirmation.
If any amount owed to us remains outstanding for more than 60 days after the issue of the relevant invoice, we may at our sole discretion (subject in each case to applicable laws and regulations):
(a) stop acting on your behalf in the invoiced matter and/or in any other engagement;
(b) retain files and/or documents; and
(c) take legal proceedings and/or engage a collections agency to recover the outstanding amount”.
14. The Claimant submitted that it had sent several reminders to the Defendant for the payment of its invoices, with the most recent payment reminder sent to the Defendant by way of a letter dated 8 April 2020 (the “Legal Notice”).
15. On 9 April 2020, the Defendant replied to the Legal Notice by way of an email stating:
“I will arrange for payment of your invoices in 4 instalments. You can expect the first payment of AED 64,850 at the end of April (week commencing 26 April). Payment will be made to the bank account details provided”.
16. On 12 April 2020, the Claimant responded to the Defendant stating that‘we accept your offer of 4 instalments to settle the outstanding and we look forward to receiving your first payment…’
17. The Claimant submitted that the Defendant had made the first instalment in the sum of AED 64,852.28 (the “First Instalment”), however, the Claimant submits that the Defendant has failed to pay the remaining installments. The sum of AED 195,609.13 remains unpaid (the “Outstanding Amount”).
18. The Claimant submits that the Outstanding Amount is payable by the Defendant, and that the Defendant has failed to adhere to the terms of the Agreement as set out under the Payment Plan and Payment Method, which, the Claimant submits constitutes a breach of the Agreement.
19. The Claimant asserts that it has rendered Services as provided for in the Agreement and that it is entitled to payment from the Defendant of the Outstanding Amount. The Claimant, in its submissions, submits that:
“By reason of the unpredictable nature of divorce and custody proceedings, it is the standard practice of the Claimant to avoid fixed or capped fee payment structures. This is primarily because it is not possible to foresee the number or nature of actions, whether criminal or civil, which may be instituted by a counter litigant in such conditions. The Defendant, as described at paragraph 26 below accepted this”.
20. Therefore, the Claimant seeks payment of the Outstanding Amount in the sum of AED 195,609.13.
21. The Defendant failed to appear at the Hearing, which was scheduled at two different occasions, although serviced notice of the Claim. On 14 January 2022, the Defendant filed an Acknowledgement of Service with its intention to defend all of the Claim, however, no further substantial submissions were made. For the purposes of this Judgment, I will consider the Defendant’s submissions for the Jurisdiction Hearing as far as it pertains to the merits of the case.
22. The Defendant, in short, objects to the Outstanding Amount and contends that the Claimant is therefore not entitled to payment of the Outstanding Amount.
23. On 7 October 2019, the Defendant had a call with the Claimant to discuss the Services (the “Call”) and during which the Defendant alleges, that the Claimant had estimated the Fees for the Services to be close to AED 100,000. Even though the Defendant considered this amount considerably high, he proceeded to appoint the Claimant for the Services due to the reputation of the Claimant and expected the Services to be completed in accordance with the Defendant’s understanding of the quality of the work produced by the Claimant.
24. The Defendant, in its submissions, further submits that he never agreed to the Outstanding Amount and that he‘agreed to make payments in instalments under enormous pressure from the Claimant to settle the Outstanding Amount and fear from their threats to cease acing on my matter’.The amount of the First Instalment was made to ensure the Claimant was paid the amount agreed upfront during the Call. The Defendant relies on various email communication between the Parties wherein the Defendant disputes the Outstanding Amount.
25. Therefore, the Defendant submits that the Claimant is not entitled to the Outstanding Amount and that the Claim should be dismissed in its entirety.
26. In essence, the disagreement between the parties pertains to whether the Claimant should be compensated for the Services rendered to the Defendant pursuant to the Agreement.
27. In my view, the Agreement between parties is clear as to the Payment Plan of the Fees and the Payment Method as stated in Paragraph 10, 11 and 13 of this Judgment, and the Defendant is clearly obligated to pay the Claimant the Fees in accordance with the Payment Plan.
28. In review of the submissions made by both parties, I find that the Claimant complied with, and performed, several activities in accordance with the Agreement. As stated in Paragraph 11 of this Judgment, the Fees for the Services provided on an hourly rate are reflected in the Claimant’s monthly invoices. The monthly invoices outline the number of hours spent by the relevant billing practitioner and a brief description of the services performed.
29. Furthermore, in accordance with the Payment Method, the Claimant’s invoices are to be paid no later than 30 days after the date they are issued. The Defendant raised, on several occasions, objections against the Outstanding Amount, however, the Defendant failed to provide any further proof or supporting documents which would indicate that the Outstanding Amount is not justified by the Claimant. Furthermore, the content of the discussion during the Call is not supported by any form of evidence and, in any case, the provided estimated Fee was merely an indication of the Fee.
30. In my view, the Defendant agreed to the terms of the Agreement and acknowledged his obligation to pay the Outstanding Amount in full as set out in Paragraph 15 of this Judgment by way of 4 instalments, which was agreed by the Claimant. The Defendant made the First Instalment shortly thereafter.
31. Therefore, I find that the Claimant has performed its contractual obligations which entitles it to payment of the Outstanding Amount in the sum AED 195,609.13.
32. The Agreement fails to mention the Claimant’s entitlements to interest in the event of an arrears of payment, therefore, I find that the Claimant’s Claim for interest shall be denied.
33. In light of the aforementioned, I find that the Defendant shall pay the Claimant the sum of AED 195,609.13 (the “Amount”).
34. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the sum of AED 9,780.45.
35. In the event the Defendant fails to comply with Paragraph 33 within 21 days from the date of this Order, interest at the rate of 9% per annum, pursuant to Practice Direction No 4 of 2017 (Interest on Judgments) will accrue on the Amount from the date of filing this Claim until the date of full payment.
36. There be no order as to costs.