What was the nature of the dispute between Hepher Associates and Rasana Engineering Industries regarding the AED 1,029,064.61 claim?
The dispute arose from a series of consultancy agreements between the Claimants, Hepher Associates Ltd and Trevor Anscombe, and the Defendant, Rasana Engineering Industries Co. LLC. The Claimants alleged that the Defendant failed to settle outstanding invoices for professional services rendered, while also unilaterally and unjustly attempting to reduce the hours billed by the Claimants. The litigation involved a multi-faceted claim for unpaid invoices, finance costs, reimbursement of Small Claims Tribunal (SCT) filing fees, and significant lost profits.
The procedural history of this matter was protracted, involving an initial default judgment that was later set aside to allow the Defendant to present a defence. However, the Defendant’s subsequent failure to engage with the court process—culminating in the withdrawal of their legal counsel—led to the final determination of the claim. As noted in the court record:
As to the specific sums owed by the Defendant to the Claimants, the Claimants have submitted that the total judgment sum is AED 1,029,064.61.
The Claimants’ case was supported by detailed documentation, including an expert report, which the Court relied upon to quantify the damages after the Defendant’s defence was struck out. For further context on the earlier stages of this litigation, see HEPHER ASSOCIATES v RASANA ENGINEERING INDUSTRIES [2018] DIFC CFI 043 — Setting aside default judgment for a real prospect of success (30 April 2018).
Which judge presided over the trial of Hepher Associates v Rasana Engineering Industries in the DIFC Court of First Instance?
The trial was presided over by H.E. Justice Shamlan Al Sawalehi in the DIFC Court of First Instance. The hearing took place on 15 April 2019, with the final judgment issued on 5 May 2019.
What arguments did Jörg Seifert and Trevor Anscombe advance on behalf of the Claimants following the Defendant's non-attendance?
Counsel for the Claimants, Jörg Seifert and Trevor Anscombe, argued that the Defendant’s persistent failure to comply with procedural requirements and their ultimate non-attendance at the scheduled trial warranted the immediate striking out of the defence. They maintained that the Claimants had fulfilled all evidentiary burdens, providing witness statements and an expert report to substantiate the quantum of their claim.
The Claimants specifically argued that their entitlement to lost profits was legally sound under the UAE Civil Transactions Law. They contended that the Defendant’s breach of contract directly resulted in the loss of future earnings, which they calculated and presented to the Court in the Particulars of Claim. As stated in the court documents:
The Claimants also claim a total of AED 498,789.36 as “Loss of Profit Due to the Claimant.” This is broken down into various sums in Table N in the Particulars of Claim.
What was the specific jurisdictional and procedural question regarding the Court's power to strike out a defence under RDC 35.14(3)?
The Court had to determine whether it possessed the authority to strike out a defence in the absence of a formal application from the opposing party when a defendant fails to appear at trial. The doctrinal issue centered on the interpretation of the Rules of the DIFC Courts (RDC) regarding the Court’s inherent case management powers. Specifically, the Court addressed whether the procedural failure of the Defendant to attend the trial, despite having been notified of the date, triggered an automatic or discretionary power to strike out the defence to ensure the efficient administration of justice.
How did H.E. Justice Shamlan Al Sawalehi apply the test for striking out a defence under RDC 35.14(3)?
Justice Al Sawalehi reasoned that the Court’s power to manage its own proceedings is paramount, particularly when a party demonstrates a pattern of non-cooperation. The judge emphasized that the Court is not required to wait for an application from the claimant to address a defendant's absence at trial. By failing to appear, the Defendant effectively abandoned its opportunity to challenge the evidence presented by the Claimants.
However, the Court clarified that striking out a defence does not equate to an automatic victory for the claimant. The Court conducted a rigorous review of the evidence to ensure the claim was proven on the balance of probabilities. As the judgment states:
The Claimants’ calculations are deemed valid based upon a preponderance of the evidence, and I therefore find in favour of the Claimant as against the Defendant in the sum of AED 1,029,064.61 (hereafter the “Judgment Sum”), comprising:
a.
Which specific DIFC statutes and RDC rules were applied to resolve the claim for unpaid invoices and lost profits?
The Court relied primarily on the Rules of the DIFC Courts (RDC), specifically Rule 35.14(3), which governs the consequences of a party's failure to attend trial. Additionally, the Court applied the UAE Civil Transactions Law to validate the Claimants' legal theory regarding the recovery of lost profits. The Court also referenced Practice Direction No. 4 of 2017 to determine the applicable interest rate on the judgment sum.
How did the Court utilize the precedents and procedural history in the case of Hepher Associates v Rasana Engineering Industries?
The Court utilized the procedural history of the case—including the previous Set Aside Order (30 April 2018)—to establish that the Defendant had been given ample opportunity to participate in the proceedings. By referencing the Case Management Order (01 November 2018), the Court demonstrated that the trial date was well-known to the Defendant. The Court also noted the Procedural order for withdrawal of legal representation (04 March 2019), which served as evidence of the Defendant's internal disarray and lack of intent to defend the claim, thereby justifying the final decision to strike out the defence.
What was the final disposition and the specific monetary relief awarded to the Claimants?
The Court entered judgment in favour of the Claimants for the full amount claimed. The total award of AED 1,029,064.61 was broken down into unpaid invoices, finance costs, SCT filing fees, and lost profits. The Court also ordered the payment of interest and legal costs. The specific orders were:
Judgment is hereby entered in favour of the Claimants as against the Defendant in the sum of AED 1,029,064.61 (the “Judgment Sum”), comprising:
a.
Furthermore, the Court ordered that:
The Defendant shall pay the Claimant interest on the Judgment Sum at the rate of 12% per annum from the date of judgment until payment.
iii.
The Court also directed that the costs be assessed by a Registrar, following the earlier Default costs assessment (18 December 2019) which provided further clarity on the recovery of legal expenses.
How does this judgment influence the practice of construction litigation within the DIFC?
This case serves as a critical reminder that the DIFC Courts will not tolerate procedural obstructionism. Practitioners must anticipate that the Court will exercise its own initiative under RDC 35.14(3) to strike out a defence if a defendant fails to attend trial. Furthermore, the judgment clarifies that while a defence may be struck out, claimants remain obligated to prove their case through a preponderance of evidence, particularly when claiming complex heads of damage such as lost profits under the UAE Civil Transactions Law.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Hepher Associates v Rasana Engineering Industries | [2018] DIFC CFI 043 | Procedural history/Set Aside Order |
Legislation referenced:
- Rules of the DIFC Courts (RDC), Rule 35.14(3)
- Rules of the DIFC Courts (RDC), Part 13
- UAE Civil Transactions Law
- Practice Direction No. 4 of 2017