This order clarifies the procedural latitude afforded to judges hearing appeals from the Small Claims Tribunal (SCT), specifically regarding the admission of fresh evidence and the rectification of calculation errors in construction contract disputes.
What was the specific financial dispute between Miqal and Merani regarding the construction of the villa fit-out?
The dispute arose from a construction contract dated 5 July 2023 for fit-out and installation works at the Claimant’s villa. The relationship soured when the Respondent (the contractor) failed to complete the works within the agreed timeframe, leading the Claimant to engage a third party to finish the project. The Claimant sought damages for this failure, while the Appellant (the contractor) contended that the works were satisfactory and that the project was only halted due to the Claimant's failure to pay the remaining contract balance.
The appeal relates to a written contract between the parties dated 5 July 2023, for the provision of services in relation to a project for the construction of fit-out and installation works at the Claimant’s villa (the “Contract”).
The Respondent issued a claim for recovery of damages in the amount of AED 434,369.25 due to the Defendant’s failure in completing the contracted works within the agreed relevant time which resulted in the Respondent contracting a third party to finish the Defendant’s agreed scope of work.
Which judge presided over the appeal of the SCT judgment in CFI 041/2023?
The appeal was heard by Deputy Chief Justice H.E. Ali Al Madhani in the DIFC Court of First Instance. The proceedings followed an initial judgment by H.E. Justice Maha Al Mheiri in the Small Claims Tribunal and a subsequent grant of partial permission to appeal by Justice Sir Jeremy Cooke on 2 June 2023. The final order with reasons was issued by Deputy Chief Justice Al Madhani on 11 September 2023.
What were the primary legal arguments advanced by Miqal and Merani regarding the contract payments?
The Appellant (Merani) argued that the SCT Judge had erred in calculating the total amount paid by the Claimant, asserting that the actual sum paid was AED 375,770 rather than the AED 434,369.25 figure used in the initial judgment. The Appellant also challenged the expert’s assessment of the percentage of works completed. Conversely, the Respondent (Miqal) maintained that the original calculation was correct and that the Appellant had failed to perform the works to a satisfactory standard, necessitating the engagement of a third party to rectify and complete the project.
The Appellant says that the works had been completed to a satisfactory standard and the Appellant only halted its agreed works based on the Respondent’s failure in paying the remainder of the Contract amount.
What was the specific legal question regarding the scope of the appeal that the Court had to answer?
The Court was tasked with determining whether the SCT Judge had made a factual error in calculating the total payments made by the Respondent to the Appellant, and whether the Court of First Instance had the procedural authority to rectify this calculation. Specifically, the Court had to resolve the discrepancy between the alleged payment figures (AED 434,369.25 vs. AED 375,770) and determine the correct refund amount based on the expert’s findings regarding the percentage of work actually completed.
How did Deputy Chief Justice Al Madhani interpret the rules regarding fresh evidence in an SCT appeal?
The Court addressed whether it could consider new evidence to rectify the SCT’s calculation. Deputy Chief Justice Al Madhani clarified that the Rules of the DIFC Courts (RDC) provide significant flexibility for judges hearing appeals from the SCT. He noted that RDC Part 44 does not apply to SCT matters, and that RDC Part 53, which governs the SCT, does not explicitly prohibit the introduction of fresh evidence.
In my view, there is nothing in RDC Part 53 which prevents or otherwise regulates the introduction of fresh evidence in an appeal from the SCT and so it is a matter left for the judge hearing the appeal.
Which specific RDC rules and procedural authorities were applied to the appeal?
The Court primarily relied on RDC Part 53, which governs the Small Claims Tribunal, and Rule 53.7, which explicitly excludes the application of RDC Part 44 to SCT proceedings. By establishing that RDC Part 44 (which governs appeals in the Court of First Instance) does not apply to the SCT, the Court confirmed that the judge hearing an SCT appeal has the discretion to manage evidence as they see fit to ensure a just outcome.
How did the Court use the permission to appeal granted by Justice Sir Jeremy Cooke?
The Court used the permission granted by Justice Sir Jeremy Cooke to narrow the scope of the appeal. Justice Cooke had granted permission specifically on the ground of whether the Claimant paid the sum of AED 434,369.25 or AED 375,770. Deputy Chief Justice Al Madhani strictly adhered to this limitation, refusing to reassess other matters, such as the percentage of works completed, which had already been determined by the expert and the SCT Judge.
On 2 June 2023, Sir Justice Jeremy Cooke granted the Appellant’s permission to appeal, namely on the ground of whether the Claimant paid the sum of AED 434,369.25 or AED 375,770 with the potential impact on the sum payable by the Defendant to the Claimant.
What was the final disposition and the specific monetary relief ordered by the Court?
The Court dismissed the appeal but modified the SCT’s judgment regarding the refund amount. By reconciling the 90% contract value payment (AED 390,932.33) with the actual receipts submitted (AED 389,945) and applying the expert’s finding that 45.89% of the work was completed, the Court ordered a refund of AED 210,999.24 to the Respondent. The Appellant was also ordered to bear the costs of the appeal.
The Appellant shall pay the Respondent’s DIFC Courts’ filing fee and costs of this appeal on the standard basis, to be assessed by the Registrar, if not agreed.
What are the wider implications for practitioners regarding SCT appeals in the DIFC?
This case confirms that the DIFC Courts maintain a pragmatic approach to SCT appeals, prioritizing the correction of manifest calculation errors over rigid procedural adherence. Practitioners should note that while RDC Part 53 provides the judge with the discretion to admit fresh evidence, the Court will remain strictly focused on the specific grounds for which permission to appeal was granted. Litigants must be prepared to provide clear, documentary evidence—such as receipts—to challenge financial findings, as the Court will not hesitate to rectify calculations if the evidence supports a different figure than that found by the SCT.
The Appellant made the decision to issue this appeal and as a result the Respondent has incurred costs. The Appellant’s appeal has failed.
In the circumstances, I consider it fair and reasonable that the Appellant should pay the Respondent’s costs of this appeal.
Where can I read the full judgment in Miqal v Merani [2023] DIFC CFI 041?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0412023-miqal-v-merani or via the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-041-2023_20230911.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- Rules of the DIFC Courts (RDC) Part 44
- Rules of the DIFC Courts (RDC) Part 53
- Rules of the DIFC Courts (RDC) Rule 53.7