This order clarifies the procedural threshold for obtaining a Default Costs Certificate under the Rules of the DIFC Courts (RDC) when Points of Dispute have already been served.
What was the specific procedural dispute between GHAM 2 Limited and Mr Ajay Bhatia regarding the request for a Default Costs Certificate?
The dispute arose in the context of the ongoing costs assessment process following the substantive proceedings in CFI 100/2021. After the Defendants filed a Notice of Commencement of Assessment on 26 July 2023, the Claimant served its Points of Dispute on 15 August 2023. Despite the Claimant having taken this step, the Defendants filed a Request for a Default Costs Certificate on 22 August 2023, effectively seeking to bypass the standard assessment process by asserting that the Claimant had failed to comply with procedural requirements.
The Court’s intervention was necessitated by the conflicting positions of the parties regarding the status of the Points of Dispute. The Defendants contended that the procedural requirements for the assessment had not been met, thereby triggering their right to a default certificate. However, the Assistant Registrar’s review of the case file and the email correspondence between the parties and the Registry revealed that the Claimant had indeed engaged with the process. Consequently, the Court found no basis for the issuance of a default certificate, as the matter was already actively moving through the assessment phase.
Which judge presided over the CFI 100/2021 costs assessment order issued on 31 August 2023?
Assistant Registrar Hayley Norton presided over this matter in the DIFC Court of First Instance. The order was issued on 31 August 2023 at 10:00 am, following a review of the procedural history and the specific filings submitted by the parties, including the Defendants' Request for a Default Costs Certificate dated 22 August 2023.
What arguments did the Defendants, Mr Ajay Bhatia and others, advance to justify their request for a Default Costs Certificate?
The Defendants argued that the procedural posture of the costs assessment entitled them to a Default Costs Certificate under the RDC. Their position was predicated on the assertion that the Claimant had failed to satisfy the necessary procedural steps required to contest the costs claimed, thereby allowing the Defendants to move for a default judgment on the quantum of costs. They relied on the timeline of filings and the perceived lack of compliance by the Claimant to justify the request.
Conversely, the Claimant’s filing of Points of Dispute on 15 August 2023 served as the primary counter-argument. By demonstrating that they had actively participated in the assessment process, the Claimant effectively neutralized the Defendants' attempt to secure a default certificate. The Court’s review of the email correspondence between the parties and the Registry further supported the conclusion that the assessment process was already underway and that a default certificate was procedurally inappropriate.
What was the precise legal question the Court had to answer regarding the application of Part 40 of the RDC?
The Court was tasked with determining whether the Defendants had met the threshold requirements for the issuance of a Default Costs Certificate under Part 40 of the RDC, given that the Claimant had already filed Points of Dispute. The legal issue centered on whether the existence of Points of Dispute—even if the Defendants disputed their procedural validity or completeness—precluded the Registrar from granting a default certificate.
The Court had to decide if the procedural integrity of the costs assessment process required the parties to continue with the exchange of pleadings rather than allowing one party to truncate the process via a default application. The question was not merely whether the Claimant had filed the documents, but whether the Court should exercise its discretion to enforce a structured timeline for the assessment of costs rather than permitting a default outcome that would circumvent the adversarial nature of the assessment.
How did Assistant Registrar Hayley Norton apply the principles of procedural fairness to dismiss the Defendants' request?
Assistant Registrar Hayley Norton applied a strict interpretation of the procedural history, prioritizing the active participation of the parties over the Defendants' attempt to secure a default. By reviewing the correspondence and the filings, the Court determined that the assessment process was already in motion. The Court’s reasoning emphasized that the filing of Points of Dispute by the Claimant necessitated a structured response from the Defendants, rather than a default certificate.
The Court’s decision was guided by the need to ensure that the costs assessment process remains transparent and fair. By dismissing the request, the Court effectively reset the procedural clock, ensuring that both parties had a clear, court-mandated timeline to resolve their differences regarding the costs. The Court’s order explicitly directed the parties to follow a specific schedule:
The Claimant shall file its Points of Dispute via the eRegistry online platform by no later than 4pm on 1 September 2023. 3.
This directive ensured that the record was formalized through the eRegistry, removing any ambiguity regarding the status of the Points of Dispute.
Which specific RDC rules and procedural authorities were applied by the Court in CFI 100/2021?
The Court relied primarily on Part 40 of the Rules of the DIFC Courts (RDC), which governs the assessment of costs. This section provides the framework for the commencement of assessment, the filing of Points of Dispute, and the conditions under which a party may apply for a Default Costs Certificate. The Assistant Registrar’s decision was also informed by the procedural history established by the Order with Reasons of H.E. Justice Maha Al Mheiri dated 26 April 2023, which set the foundation for the costs assessment.
The Court’s application of Part 40 was focused on the procedural requirements for the exchange of documents. By mandating that the Claimant file its Points of Dispute via the eRegistry, the Court ensured compliance with the technical requirements of the RDC, thereby providing a clear path forward for the assessment.
How did the Court utilize the procedural history and previous orders to manage the costs assessment?
The Court utilized the Order of H.E. Justice Maha Al Mheiri as the jurisdictional anchor for the costs assessment. By referencing this order, the Assistant Registrar ensured that the current procedural dispute was viewed as a continuation of the substantive litigation rather than an isolated event. The Court also relied on the specific dates of the Notice of Commencement of Assessment and the subsequent Points of Dispute to establish a timeline of events.
This chronological approach allowed the Court to identify that the Defendants' request was premature or otherwise inconsistent with the ongoing exchange of documents. By citing the email correspondence between the parties and the Registry, the Court demonstrated that the procedural management of the case was being actively monitored, and that the parties were expected to adhere to the Court’s established timelines rather than seeking procedural shortcuts.
What was the final disposition of the Defendants' request and what orders were made regarding costs?
The Court dismissed the Defendants' Request for a Default Costs Certificate in its entirety. Furthermore, the Court ordered that the Defendants bear their own costs of the Request, signaling that the application was considered unnecessary or procedurally flawed. The Court established a strict timeline for the remaining steps in the assessment process:
The Defendants shall file their reply (if any) to the Points of Dispute by no later than 4pm on 5 September 2023. 4.
This order effectively compelled the parties to engage in the substantive assessment of costs, ensuring that the process would proceed on its merits rather than through default.
What are the practical implications for DIFC practitioners regarding the filing of Default Costs Certificates?
This case serves as a reminder that the DIFC Courts will not permit the use of Default Costs Certificates to bypass the adversarial assessment process when a party has demonstrated an intention to contest the costs. Practitioners must ensure that they are fully compliant with the eRegistry filing requirements and that they have a clear basis for any default application. If Points of Dispute have been served, even if there are questions regarding their form, the Court is likely to favor a structured assessment process over a default judgment.
Practitioners should anticipate that the Court will prioritize the orderly resolution of costs disputes. Any attempt to secure a default certificate while the other party is actively participating in the process is likely to be viewed unfavorably, potentially resulting in the dismissal of the application and an adverse costs order against the applicant.
Where can I read the full judgment in Gham 2 Limited v Mr Ajay Bhatia [2023] DIFC CFI 100?
The full order can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-100-2021-gham-2-limited-v-1-mr-ajay-bhatia-2-tiya-holdings-limited-3-sol-international-properties-limited
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Gham 2 Limited v Mr Ajay Bhatia | CFI 100/2021 | Substantive proceedings and prior costs order |
Legislation referenced:
- Part 40 of the Rules of the DIFC Courts (RDC)