Did Commercial Bank of Dubai correctly argue that the Third Defendant’s Notice of Commencement of Assessment of Costs was premature under RDC 40.1?
The dispute arose from a procedural disagreement regarding the timing of cost recovery in the ongoing litigation between Commercial Bank of Dubai (the Claimant) and several respondents, including the Third Defendant, Shaikha Raneya Hamad Mubarak Hamad Al Khalifa. Following a successful interim application by the Third Defendant to strike out a witness statement, the Claimant sought to strike out the Third Defendant’s subsequent Notice of Commencement of Assessment of Costs. The Claimant contended that because the substantive proceedings remained ongoing, the assessment of costs for an interim matter was premature.
The Claimant’s core argument relied on a strict interpretation of the Rules of the DIFC Courts (RDC). As noted in the court’s summary of the arguments:
The Claimant also argues that the order dated 11 March 2018 does not order the Third’s Defendant application costs to be assessed immediately, and since the substantive proceeding remain ongoing, the Third Defendant has commenced assessment proceedings prematurely, in breach of Rule 40.1 of the RDC.
The Claimant further requested that the Third Defendant be ordered to pay the wasted costs of the assessment proceedings. The Third Defendant countered that the assessment was entirely appropriate, as the specific interim application had been fully resolved by the court’s previous order, and the parties had failed to reach a voluntary agreement on the quantum of costs. The matter was brought before Judicial Officer Nassir Al Nasser to determine whether the assessment could proceed or if it must be stayed until the final resolution of the entire case. Source: DIFC Courts
Which judge presided over the application to strike out the Notice of Commencement of Assessment of Costs in CFI 047/2017?
Judicial Officer Nassir Al Nasser presided over this application in the Court of First Instance. The order was issued on 21 June 2018, following a review of the Claimant’s application dated 14 May 2018 and the Third Defendant’s response.
What were the specific legal arguments advanced by Commercial Bank of Dubai and the Third Defendant regarding the assessment of costs?
The Claimant, represented by Rebecca Copley, argued that RDC 40.1 establishes a general rule that costs should not be assessed until the conclusion of the entire proceedings. They maintained that the order dated 11 March 2018, which originally granted the Third Defendant’s application, did not explicitly state that costs should be assessed "immediately." Consequently, the Claimant viewed the Third Defendant’s move to initiate a detailed assessment as a procedural breach.
Conversely, the Third Defendant argued that the Claimant’s position was based on a fundamental misunderstanding of the RDC. The Third Defendant asserted that the interim application—which concerned the striking out of a witness statement—was a discrete, concluded part of the proceedings. Because the underlying application was fully resolved and the parties could not agree on the costs, the Third Defendant argued that the right to seek a detailed assessment had crystallized. The Third Defendant characterized the Claimant’s application as a tactical maneuver to avoid paying costs that had already been ordered by the court.
What was the precise legal question regarding RDC 40.1 that the court had to resolve?
The court was tasked with determining whether the "general rule" under RDC 40.1, which mandates that costs not be assessed until the conclusion of proceedings, acts as an absolute bar to assessing costs for an interim application that has already been finalized by a court order. The doctrinal issue centered on whether an interim application, once decided, constitutes a "part of the proceedings" that is sufficiently concluded to allow for immediate cost assessment, or whether the "conclusion of the proceedings" refers exclusively to the final judgment of the entire case.
How did Judicial Officer Nassir Al Nasser apply the test for cost assessment under RDC 40.1?
Judicial Officer Al Nasser focused on the nature of the interim application that had been decided by Justice Ali Al Madhani on 11 March 2018. The Judicial Officer reasoned that because the application to strike out the witness statement had been granted and was not "costs in the case," it was a closed matter. The reasoning emphasized that the court’s intent in the original order was to finalize the liability for those specific costs.
The Judicial Officer clarified the interpretation of the RDC in the following terms:
I believe that the Judge was fully aware that the Application dated 31 January 2018 was concluded. If the Application was not concluded the Judge would have ordered that costs shall be in the case.
By distinguishing between an application that is "concluded" and one that remains "in the case," the Judicial Officer established that the assessment of costs for the former is not premature, even if the main litigation is ongoing.
Which specific RDC rules and prior orders were applied to determine the validity of the assessment?
The court primarily applied RDC 40.1, which governs the timing of detailed assessments. Additionally, the court relied on RDC 36.30, which dictates that a judgment or order takes immediate effect. The court also referenced the order of H.E. Justice Ali Al Madhani dated 11 March 2018, which had originally granted the Third Defendant’s application to strike out the witness statement and ordered the Claimant to pay the associated costs.
How did the court utilize the order of Justice Ali Al Madhani in its decision-making process?
The court utilized the 11 March 2018 order as the primary evidence that the interim application was a finalized, independent event. By reviewing the language of that order, which directed that costs be assessed if not agreed, the court determined that the Third Defendant had a clear procedural path to initiate the assessment. The court rejected the Claimant’s argument that the absence of the word "immediately" in the 11 March order prevented the assessment, noting that the nature of the order itself implied that the costs were ripe for determination.
What was the final disposition and the specific orders made regarding costs?
The court dismissed the Claimant’s application to strike out the Notice of Commencement of Assessment of Costs. Furthermore, the court ordered the Claimant to pay the Third Defendant’s costs for the application itself. As stated in the order:
The Claimant shall pay the Third Defendant costs of the Application, to be assessed by the Registrar if not agreed.
The Claimant’s request for the Third Defendant to pay the Claimant’s wasted costs was denied.
What are the practical implications of this ruling for DIFC practitioners regarding interim cost assessments?
This decision provides clarity for practitioners that they need not wait for the final trial judgment to recover costs for successful interim applications. If an interim application is fully resolved by a court order and the parties cannot agree on the quantum of costs, the successful party may proceed with a detailed assessment. Practitioners should be aware that attempting to strike out such assessments on the basis of "premature filing" under RDC 40.1 may result in an adverse costs order if the court deems the interim matter to be a concluded part of the proceedings.
Where can I read the full judgment in Commercial Bank of Dubai v M/S Totora Restaurant and Lounge [2018] DIFC CFI 047?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0472017-commercial-bank-dubai-psc-v-1-ms-totora-restaurant-and-lounge-llc-2-ali-abdullah-al-sidani-3-shaikha-raneya-hamad-mu
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Commercial Bank of Dubai v M/S Totora Restaurant and Lounge | CFI 047/2017 | Primary matter |
Legislation referenced:
- RDC 40.1 (General rule for assessment of costs)
- RDC 36.30 (Effect of Judgment or Order)
- RDC 38.7 (Default rules as to costs)