CFI 024/2020 Hana Habib Mansoor Habib Al Herz v (1) Sunset Hospitality Holdings Limited (2) Peatura Fz Llc

Claim No: CFI 024/2020

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

HANA HABIB MANSOOR HABIB AL HERZ

Defendant/Applicant

and

(1) SUNSET HOSPITALITY HOLDINGS LIMITED
(2) PEATURA FZ LLC

Claimants/Respondents

ORDER OF H.E JUSTICE SHAMLAN AL SAWALEHI

UPON the Claimants’ Part 8 Claim issued on 12 March 2020

AND UPON the Defendant’s Defence dated 20 April 2020

AND UPON the Claimants’ Reply to Defence dated 5 May 2020

AND UPON the Defendant’s three applications each dated 26 July 2020 seeking permission to file additional evidence, permission to file a counterclaim and requesting the proceedings to be transferred to the Part 7 procedure (the “Applications”)

AND UPON the Claimants’ Response to the Applications dated 10 August 2020

AND UPON the Defendant’s Reply to the Claimants’ Response to the Applications dated 16 August 2020

AND UPON reviewing the relevant documents on the Court’s file

IT IS HEREBY ORDERED:

1. The Applications are dismissed.

2. The Defendant shall pay the Claimants’ costs of the Applications on the standard basis, to be assessed by a Registrar if not agreed.

Issued by:
Nour Hineidi
Deputy Registrar
Date of Issue: 1 October 2020
Time: 5pm

SCHEDULE OF REASONS

Introduction

1. The Defendant makes three applications to the Court in these Part 8 proceedings (the “Claim”). These are as follows: an application for permission to file additional evidence (the “Evidence Application”), an application for permission to file a counterclaim (the “Counterclaim Application”) and an application for these proceedings to be transferred to the Part 7 procedure (the “Transfer Application”) (the “Applications”). Each application was filed on 26 of July 2020 and served on the Claimants the following day. It should be noted from the outset that the Applications were issued only 15 days before the scheduled hearing of the Claim, being five working days before the hearing bundle was due to be filed, and ultimately caused that hearing to be vacated.

Late Applications

2. Part 8 of the Rules of the DIFC Courts (the “RDC”) provides for a simple regime for claims. Amongst other things, the Part 8 procedure does not require as much exchange of information between parties. Claimants in Part 8 proceedings expect an expedient and economical disposal of their claim. The Part 8 procedure will not always be appropriate, of course. Where a defendant to a Part 8 claim contends that the regime is not suitable – for example, where it is contended that there is a substantial dispute of fact – pursuant to RDC 8.17, the defendant is required to state the reasons for his contention when filing his acknowledgment of service; that is, at the earliest opportunity he has.

3. The Part 8 rules concerning the filing and serving of written evidence, including the timeframes given to parties to file and serve such evidence, are set out from RDC 8.23 to RDC 8.33. These timeframes will not always be adequate and occasionally, moreover, a party will want to submit additional evidence outside of the opportunities provided to them by the rules. In such circumstances, pursuant to RDC 8.30, such a party must apply to the Court for an extension of time or for permission to file additional evidence, unless, pursuant to RDC 8.31, which is subject to RDCs 8.32 and 8.33, the parties agree to the same in writing.

4. By her Transfer Application, the Defendant asks the Court to transfer the case to the Part 7 procedure. The Defendant did not express any contention that the Part 8 procedure was inappropriate with her acknowledgment of service dated 25 March 2020, though she did make an objection to the use of the procedure in her Defence dated 20 April 2020. More will be said on this below.

5. By her Counterclaim Application, the Defendant asks for permission to advance a counterclaim against the Claimants. The Defendant requires the Court’s permission under RDC 21.8(2) as no counterclaim was pleaded with her Defence to the Claim.

6. By her Evidence Application, the Defendant asks for permission to file and serve evidence which she says is necessary to counter “numerous false and frivolous allegations against the Defendant… [and the inclusion of] fresh/additional facts [in respect of] the transactions which took place between the parties [in the Claimants’ Reply to Defence dated 5 May 2020]. The Defendant had first expressed her desire to respond to the Reply to Defence on 20 May 2020. It was not until 26 of July 2020, however, that she formally applied to the Court for permission to file additional evidence.

7. The Applications have all come, therefore, very late and, as mentioned above, they have caused the hearing of this Claim to be vacated.

8. The Defendant chiefly relies on two circumstances in explaining why the Applications were made late. The circumstances are described in near identical terms in each of the Applications. To cite from one application:

… the present application could not be filed at an earlier stage as the Defendant has recently been blessed with the baby, and resulting out of the outbreak of Covid-19 pandemic wherein the health and safety is of utmost importance; the Defendant was not in a position to trace out and collect the required documentation (in lieu of the fact that the said transactions pertain to the years starting from 2015 (original emphasis)), travel to and access the office and its files etc… [I]t is pertinent to mention that on 22.03.2020, the Emirate of Dubai started an 11-day sterilisation campaign followed by a complete lockdown starting from 04.04.2020, and till date the restrictions are being eased down; in lieu of the same the movement of the Defendant was also restricted and keeping in mind the health and safety of the baby and Defendant’s family, the Defendant was not in a position to trace out and collect all the [relevant] documents…

In a document entitled “Defendant’s Reply,” dated 16 August 202 and submitted after the Claimants’ response to the Applications, the Defendant has explained a third circumstance which she says contributed to the Applications being made late:

Further, the Defendant’s mother is an 85… year old lady who also needs to be taken care of by the Defendant, and starting from March itself she… has not been keeping well, as she had to be admitted to hospital, then constantly monitored and given therapies followed by regular health check-ups etc. (original emphasis);… [as such,] the Defendant was not able to move the said application at an earlier stage… [S]uch a small baby and the old-aged mother [need] full time attention and regular care… for numerous reasons, hence, it has been very difficult for the Defendant to manage everything…

The three circumstances are, therefore, firstly, the birth of the Defendant’s baby – for which my congratulations are extended – secondly, the Covid-19 response in Dubai and in particular the lockdown that was imposed as part of it and, thirdly, the poor health of the Defendant’s mother (the “Causes of Delay”) – to whom I extend my best wishes.

9. Importantly, on the Defendant’s case, these three circumstances meant that, in the case of the Evidence Application, the Defendant “was not in a position to trace out and collect all the [relevant] documents”; in the case of the Counterclaim Application, and following on from not being able to collect documents, that she was unable to “get the accompanying counterclaim prepared and filed at an earlier stage”; and, in the case of the Transfer Application, that that application simply “could not be filed at an earlier stage [due to the Causes of Delay].” The implication of these submissions is that the Defendant was not delayed in making the Applications because, due to the Causes of Delay, she, say, needed more time to consider a response to the Claimants’ Reply to Defence; instead, she was delayed because, due to the Causes of Delay, she was simply unable to take certain steps; steps, crucially, which she had understood to be appropriate or required immediately. In other words, on her own case, the Defendant believed from early on that additional evidence should be filed and served in support of her defence, that she should issue a counterclaim against the Claimants and that the Claim was not appropriate for the Part 8 procedure. In determining the Applications, therefore, the primary question will be whether the Causes of Delay can in fact be deemed factors which account for the delay in making the Applications.

10. As a final preliminary remark, it should be stated that the Defendant’s submissions have proved difficult to follow. The Claimants have submitted that the Defendant has not submitted evidence in support of the Applications. This may well be correct. To the extent that it is not correct, it can at least be said that it is unclear where the evidence which the Defendant seeks permission to file and serve – as additional evidence and in support of her proposed counterclaim, and which she filed with her Applications -stops and where the evidence supporting the Applications themselves starts. For the most part, the evidence appears repetitive and in some cases the Defendant admits that it is.

11. With that said, I do not think that a detailed investigation into evidence that the Defendant has submitted is required. For me, the Applications each fail at earlier junctures.

The Evidence Applications

12. In the Evidence Application, the Defendant applies under RDC 8.30 for permission to serve and file additional evidence in support of her defence against the Claim. She says that the need for additional evidence arose upon the Claimants’ submission of their Reply to Defence in which, the Defendant says, in the supporting witness statement, “the Claimants have made numerous false and frivolous allegations against the Defendant[;] furthermore, the Claimants have brought on record fresh/additional facts [regarding] the transactions which took place between the parties.” The Defendant adds, further:

… it is pertinent to mention that said additional/fresh facts brought on record by the Claimants have been molded by the Claimants in a manner to give a wrongful interpretation of the true and accurate transaction which took place between the parties; and all this in order to mislead this Hon’ble Court against the Defendant and [to seek] unlawful gains for themselves.

13. It is not necessary to outline the “additional/fresh facts” that the Defendant refers to, nor the evidence which the Defendant wishes to file in response thereto. In my judgment, irrespective of the whether the Defendant is correct in her analysis generally, her Evidence Application fails for unrelated reasons. I have come to this conclusion for the following reasons.

14. The Defendant first requested permission from the Court to respond to the Claimants’ Reply to Defence by way of email to the Registry on 12 May 2020. In that email, the Defendant requested “14 days’ time to respond on the [Reply to Defence].” From this request, a conclusion can be drawn: whatever response the Defendant wished to make to the Claimants’ Reply to Defence, and irrespective of whether or not she had sought permission to make it in the correct way, the Defendant had determined that 14 days would be a sufficient amount of time within which to do so.

15. Eight days later, on the 20 May 2020, the Defendant again emailed the Registry: “The defendants would like to respond on the Claimants further witness statement. We request DIFC court to grant us time for the response.” The Registry replied on the same day, stating, “Please provide reasons for the Defendant’s request below.”

16. On 28 May 2020, the Claimants’ legal representatives emailed the Registry, noting that the Defendant had not provided a response to the Registry’s email of 20 May 2020 and had not complied with RDC 8.30, by which the Defendant should have applied to the Court in the usual way for permission to file and serve additional evidence. In the circumstances, the Claimants sought directions as to the listing of a hearing in this case.

17. The same day, on 28 May 2020, the Registry asked the parties to provide their mutual availability for a hearing. On 4 June 2020, over seven weeks prior to the Defendant filing the Evidence Application, it was indicated on the Defendant’s behalf, and without any reference to any intended or possible further applications, that the hearing could be fixed for a date between 21 June and 9 July. It was later indicated, on 28 June 2020, that the Defendant could attend a hearing after 10 August 2020. Again, there was no reference to any further applications. From these indications, a second conclusion can be drawn: whatever applications the Defendant intended to make when indicating her availability for a hearing, if any, she expected that they could be made and determined in time for a hearing listed at the earliest on 21 June and subsequently on 11 August 2020. Indeed, the more likely conclusion is that the Defendant no longer intended to make any further applications, including one for permission to file and serve additional evidence.

18. The Causes of Delay have been outlined above. The Claimants highlight that the Defendant had previously, in an email to the Registry dated 5 April 2020, relied on the fact that she has recently had a baby: “[t]hat was now over 4 months ago, and the Defendant should not be permitted to continue to recycle this as an excuse for the lateness of this application. [And] COVID-19 movement restrictions in Dubai have been relaxed for a significant period of time.” (The poor health of the Defendant’s mother was disclosed in a submission made after the Claimants’ response to the Application.)

19. As mentioned above, the Claimants also submit that the Defendant has not filed evidence in support of the Evidence Application. They say that, instead, the Defendant has unilaterally and without permission filed her own second witness statement along with 91 pages of exhibit as well as the second witness statement of one of her legal advisors. The Claimants say that this evidence should have been filed at the time the Defendant filed the Acknowledgement of Service, pursuant to RDC 8.26, or, if sought to be introduced late, should not have been filed until this Court had given her permission to do so: “[t]he net result is that the Defendant has not actually adduced any witness or documentary evidence in support of this application, contrary to what is suggested.”

20. The Claimants contend, furthermore, that Defendant has failed to comply with RDC 23.16 which requires that “[e]very application should be made as soon as it becomes apparent that it is necessary or desirable to make it.” As a result, the Claimants say, the Defendant has derailed these Part 8 proceedings at a time when the Claimants were preparing the hearing bundle and skeleton argument for the hearing listed for 11 August 2020.

21. I agree with the Claimants. If it is assumed that by 12 May 2020, the date on which the Defendant emailed the Court requesting time to respond to the Reply to Defence, the Defendant had become aware of the necessity or desirability to file and serve additional evidence – a process required to be done by application – by RDC 23.16, the Defendant was under an obligation to do so immediately. Immediacy will be determined on a case by case basis, but in my judgment, by two months later when the Evidence Application had been filed, and particularly as the hearing was only 15 days away by then, that period had long since expired.

22. I am not satisfied that the that the Causes of Delay on which the Defendant relies as justifications for the Evidence Application being late qualify as justifications. As the Claimants have submitted, the Defendant had relied on the birth of her baby four months prior to her making the Evidence Application. In my view, she had ample time to make appropriate arrangements in the interests of her case in the ensuing time. The same can be said regarding the care that was required for the Defendant’s mother. Nor did the lockdown in Dubai due to the Covid-19 pandemic persist for so long that the Defendant or anyone appointed by her would not be able to collect the documentation which she now asks the Court to permit to be filed as evidence in these proceedings. Indeed, a step the Defendant could have taken would have been to apply for the proceedings to be stayed on account of the Causes of Delay. Another step could have been to apply for an extension of time in which to make any applications she thought necessary. Neither of these steps would have jeopardised the safety or wellbeing of the Defendant’s baby or mother and could have been taken by her legal representatives on her behalf in any event. The Defendant has been very unspecific about how the Causes of Delay in fact caused delay, while I am unable to determine whether permission should or should not be granted without a clear picture of precisely this.

23. Furthermore, on 12 May 2020, when the Defendant emailed the Court requesting 14 days to respond to the Claimants’ Reply to Defence, the Defendant thereby indicated that, in her estimation, she could adequately respond to the Reply to Defence in only two weeks. No explanation has been given to the Court as to why the Defendant in fact took around five times longer than two weeks to finally make the Evidence Application. The Causes of Delay were already present on 12 May 2020 and so it can be assumed that the two week estimation was made with them in mind.

24. Nor has an explanation been given regarding the fact that the Defendant gave indications as to her availability for a hearing date which suggested that she no longer intended to make any applications, or, alternatively, that she expected that any applications could be made and determined before any hearing which took place on a date which she indicated she would be available for. Instead, in the Evidence Application, the suggestion is that she simply could not have made the Evidence Application earlier due to the Causes of Delay. To the extent that the Defendant genuinely struggled to make the Evidence Application as she says is the case, in my view, her counsel should have informed her opponents and this Court of the same and should certainly not have proceeded to participate in listing a hearing which it was known to them would likely need to be vacated.

25. For me, the Evidence Application appears to be an afterthought at best, the entertainment of which would be inconsistent with the streamlined procedure that Part 8 of the RDC is supposed to facilitate. The Evidence Application is accordingly dismissed.

The Counterclaim Application

26. By her Counterclaim Application, the Defendant seeks permission from the Court to issue a counterclaim against the Claimants. The Defendant submits that, due to the Causes of Delay, she was unable to file a counterclaim along with her Defence. As such, as in the Evidence Application, the Defendant’s case is not that she needed more time to consider her response to the Claimants’ Claim due to the Causes of Delay, but rather that she was unable to execute steps which it was apparent to her she should take in the interests of her case. The Defendant has stated:

Through the accompanying counterclaim, the Defendant brings various Counterclaims that arise out of the same facts and transactions which have given rise to the Claim (filed by the Claimant) and which have, to a large extent, been referred to in the Particulars of Claim, Defence and Reply.

27. For their part, the Claimants largely repeat the submissions they made in respect of the Evidence Application. They say that the Application is not supported by evidence and that the Defendant herself had indicated availability for the Part 8 hearing in the matter, while the Causes of Delay do not justify the delay in making the Counterclaim Application.

28. I agree with the Claimants and apply my reasons for rejecting the Evidence Application, mutatis mutandis. I add one further point. The Counterclaim Application appears to me to be particularly hopeless in as much as, on the Defendant’s own case, the prospective counterclaim arises “out of the same facts and transactions which have given rise to the Claim… and which have, to a large extent, been referred to in the Particulars of Claim, Defence and Reply.” In short, on the Defendant’s own case, her proposed counterclaim had already largely been pleaded.

29. Moreover, of the 96-page exhibit that the Defendant has submitted with the prospective counterclaim, 89 are already in evidence. The fact that the prospective counterclaim arose out of the facts from which the Claim had arisen and which had “largely” been referred to in the evidence already submitted and, furthermore, that the evidence supporting the prospective counterclaim only included 7 pages of evidence not yet on the Court file strikes me as entirely inconsistent with an application submitted so late that it was part responsible for the vacation of a hearing of the Claim. The Causes of Delay, in my judgment, simply do not account for the absence of a statement which, on the Defendant’s own case, could presumably have been completed quite swiftly at the time her Defence was prepared.

30. Moreover, on the Defendant’s own case, the need for a counterclaim will have been immediately apparent to her upon being served with the Claim. RDC 23.16 is relevant again, therefore, again.

31. In my view, the Counterclaim Application as pleaded simply does not add up and is accordingly dismissed.

The Transfer Application

32. By her Transfer Application, the Defendant requests that the proceedings are transferred from the Part 8 procedure to the Part 7 procedure. She says:

33. The Claimants submit that, again, the Transfer Application is not supported by evidence. The Claimants also submit that the Defendant is incorrect to state that she had already objected to the Part 8 procedure: “[t]he Defence as filed in fact deferred ‘to the Court’s discretion under RDC 8.4 as to whether to continue with the Part 8 procedure,’ which is consistent with the course adopted by the Court, namely to hold a hearing of the Part 8 proceedings.”

34. The Claimants further object to the fact that, having deferred the question of the appropriateness or otherwise of the Part 8 procedure to the Court, the Defendant then failed to bring what became the Transfer Application until 26 July 2020, only five days before the hearing bundle was due.

35. I agree with the Claimants. The Defendant has offered no explanation as to why, when the Claim is apparently so unsuitable for the Part 8 procedure, she had deferred the question of whether the Claim should continue under Part 8 to the Court. Of course it was for the Court to determine the question, but one would have expected more detailed and persuasive submissions if the position which the Defendant now advances was genuinely held by her at the start of these proceedings. Indeed, not only did the Defendant defer the question of the appropriateness or otherwise of the Part 8 procedure to the Court, but she went on to participate in the scheduling of the hearing of the Part 8 Claim and, moreover, remained silent on the question thereafter until a matter of days before the hearing date. This conduct strikes me as incompatible with make-or-break type account that the Defendant now gives of the situation in the Transfer Application.

36. Nor do the Causes of Delay assist the Defendant: on her own case, evidence that the Part 8 procedure was inappropriate for the Claim was present as early as her Defence; indeed, she discussed the appropriateness or otherwise of the procedure in that submissions. It is unclear why, therefore, the Causes of Delay rendered her unable to make the Transfer Application earlier. In my judgment, the Defendant changed her position and this is what accounts for the delay in making the Application.

37. The Transfer Application is dismissed.

Costs

38. The general rule under RDC 38.7 is that the unsuccessful party pays the costs of the successful party. The Defendant, who is the unsuccessful party, is therefore ordered to pay the costs of the Claimants, who are the successful parties. The Defendant shall pay the Claimants’ costs on the standard basis.

Conclusion

39. For the reasons given above, the Applications are dismissed and the Defendant shall pay the Claimants their costs of the Applications on the standard basis, to be assessed by a Registrar if not agreed.