What were the specific factual grounds for Salem Dwela’s claim for rescission of the 2010 Sale and Purchase Agreement against Damac Park Towers Company?
Salem Dwela sought to rescind a Sale and Purchase Agreement (SPA) dated 18 May 2010 regarding a residential unit in the Park Towers development. The claimant alleged that he was induced to enter the contract based on specific verbal assurances provided by the developer during negotiations. Mr. Dwela contended that he had explicitly stated he would only invest in a completed property, and that the defendant had provided misleading information regarding the development's status, the physical dimensions of the unit, and the amenities associated with the property.
As detailed in the court records:
Accordingly, the Claimant was informed that Park Towers, DIFC was near completion with only some ‘snagging works’ remaining and the completion was expected within three months. The specific unit offered was to be 2402.53 square feet, on the 7th Floor of the building, with a full pool view and two parking bays.” Mr. Dwela says that based on those representations he entered into the SPA on 18 May 2010.
Despite paying the full purchase price by July 2011, Mr. Dwela refused to take possession, arguing that the unit failed to meet these promised specifications. He sought rescission of the contract and the recovery of his investment, alongside damages for the alleged misrepresentations.
Which judge presided over the trial of Salem Dwela v Damac Park Towers Company Limited in the Court of First Instance?
The trial was presided over by Justice Lord Angus Glennie in the DIFC Court of First Instance. The hearing took place on 5 December 2021, with the final judgment issued on 20 December 2021.
What legal arguments did Salem Dwela and Damac Park Towers Company advance regarding the alleged misrepresentations and the counterclaim for specific performance?
Mr. Michael Wheater, representing the claimant, argued that the representations made in 2010 were material inducements that influenced Mr. Dwela’s decision to sign the SPA. The claimant’s position was that the failure of the unit to align with the promised pool view, size, and completion timeline constituted actionable misrepresentation under the DIFC Law of Obligations. Mr. Dwela sought to rescind the contract entirely, effectively attempting to unwind the transaction a decade after the initial payment.
Conversely, Damac Park Towers Company, represented by Mr. Waleed Dwela as a McKenzie Friend, maintained that no such categorical assurances were given. The defendant argued that the SPA contained standard clauses allowing for design variations and that the claimant’s expectations were inconsistent with the contractual terms. Damac counterclaimed for specific performance, demanding that the claimant finalize the handover process, and sought recovery of outstanding service charges, interest, and costs associated with the unit’s maintenance during the period the claimant refused to take possession.
What was the precise doctrinal issue the court had to resolve regarding the limitation period and the nature of the misrepresentation claim?
The court had to determine whether the claimant could successfully establish a claim for non-fraudulent misrepresentation after his original breach of contract claim had been struck out. A critical jurisdictional and procedural hurdle had already been cleared by the Court of Appeal, which determined that the misrepresentation claim was not statute-barred. The court was tasked with deciding whether the claimant had met the burden of proof to demonstrate that the alleged representations were actually made and that they were false at the time of the contract's formation, or if the contractual terms precluded such claims.
How did Justice Lord Angus Glennie apply the test for misrepresentation to the facts of the Dwela case?
Justice Glennie analyzed the evidence to determine if the defendant had made the specific representations alleged by the claimant. The court found that the claimant failed to provide sufficient evidence that the developer had provided a "categoric assurance" regarding the pool view or the exact completion date. The judge noted the inherent improbability of such a guarantee in the context of a large-scale development project.
Furthermore, the court emphasized that the contract itself contained provisions that explicitly permitted the developer to modify the unit's design. As the judge noted:
However, there is in my view very great difficulty in implying any such representation in circumstances where the SPA itself in clause 12 specifically allows Damac to make variations to the plans and in particular (clause 12.2) “to change, vary or modify the design, layout or location of the Unit” (emphasis added).
Consequently, the court concluded that the claimant could not rely on pre-contractual statements that were contradicted by the express terms of the signed SPA.
Which specific DIFC statutes governed the court’s assessment of the misrepresentation claim and the limitation periods?
The court relied on the DIFC Law of Obligations (DIFC Law No. 5 of 2005), specifically Articles 29 and 30, which define misrepresentation and the associated liability. Regarding the limitation period, the court referenced Article 9(2) of the Law of Obligations, which provides a 15-year limitation period for such claims, distinguishing it from the limitation period for breach of contract claims under Article 123 of the DIFC Contract Law (DIFC Law No. 6 of 2004). Additionally, the court cited the DIFC Law of Damages and Remedies (DIFC Law No. 7 of 2005) regarding the assessment of damages.
How did the court utilize English and DIFC precedents to evaluate the claim of misrepresentation?
The court referenced Brown v Raphael [1958] Ch 636 and Spice Girls Ltd v Aprilia World Service BV [2002] EWCA (Civ) 15 to guide its interpretation of misrepresentation. These authorities were used to assess whether the statements made by the developer could be construed as actionable misrepresentations or merely non-binding negotiations. Furthermore, the court was bound by the previous Court of Appeal ruling in CA-009-2020, which had established that while the breach of contract claim was statute-barred, the misrepresentation claim remained a viable, albeit difficult, cause of action for the claimant to pursue.
What was the final disposition of the court regarding the claim and the counterclaim for service charges?
The court dismissed the claimant’s claim for misrepresentation in its entirety. Regarding the defendant’s counterclaim, the court granted the request for specific performance, ordering the claimant to take possession of the unit. The court also ordered the claimant to pay damages and interest.
The Claimant shall within 28 days pay the Defendant the sum of AED 370,000 by way of damages and interest to the date of judgment
The court further ordered the claimant to comply with the handover procedures:
The Claimant shall within 28 days take all steps necessary under clauses 5.3 and 6.4 of the SPA to take possession of the unit and to cooperate in and sign the required documentation
What are the wider implications of this judgment for practitioners handling real estate disputes in the DIFC?
This case reinforces the high evidentiary threshold required to prove misrepresentation in the face of a signed Sale and Purchase Agreement. It serves as a reminder that courts are reluctant to allow pre-contractual oral statements to override express contractual provisions, particularly those involving "variation" or "modification" clauses common in real estate developments. Practitioners should anticipate that claims for rescission based on alleged verbal assurances will face significant scrutiny if the SPA contains clear language granting the developer flexibility in design and completion. The judgment also underscores the court's willingness to enforce specific performance in property disputes, ensuring that buyers cannot indefinitely avoid their contractual obligations simply by alleging misrepresentation without robust proof.
Where can I read the full judgment in Salem Dwela v Damac Park Towers Company Limited [2018] DIFC CFI 083?
The full judgment is available on the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/salem-dwela-v-damac-park-towers-company-limited-2018-difc-cfi-083-1
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Brown v Raphael | [1958] Ch 636 | Authority on misrepresentation |
| Spice Girls Ltd v Aprilia World Service BV | [2002] EWCA (Civ) 15 | Authority on misrepresentation |
| Salem Dwela v Damac Park Towers | CA-009-2020 | Established viability of misrepresentation claim |
Legislation referenced:
- DIFC Contract Law (DIFC Law No. 6 of 2004), Article 123
- DIFC Law of Obligations (DIFC Law No. 5 of 2005), Articles 29, 30, and 9(2)
- DIFC Law of Damages and Remedies (DIFC Law No. 7 of 2005), Part 3