What was the nature of the dispute between MAB and MACE regarding the final payment and the alleged construction defects?
The dispute arose from a renovation agreement dated 4 December 2021, under which MAB (the Claimant) was appointed as the contractor for the renovation of MACE’s (the Defendant) property for a fixed fee of AED 1,374,623.25, later adjusted to AED 1,832,606 including variations. The Claimant sought the final payment under the contract, asserting that it had completed the agreed scope of work. Conversely, the Defendant refused payment, alleging poor workmanship—specifically regarding tiling, painting, and waterproofing—and significant delays in project completion.
The core of the disagreement centered on the "snagging" phase. While the Claimant argued that the Defendant failed to agree on a single, consolidated snagging list within the contractually mandated period, the Defendant maintained that the work was fundamentally defective. The Defendant counterclaimed for the costs of rectification and damages resulting from the project's delay. As noted in the judgment:
The Defendant is seeking damages for the cost of fixing the house roof waterproofing, the delay caused by the Claimant, painting parts of the house and professional costs associated with this claim, including engineering inspection fees and legal fees.
47.
Which judge presided over the SCT hearing in MAB v MACE and when did the proceedings take place?
The matter was heard before H.E. Deputy Chief Justice Ali Al Madhani, sitting in the Small Claims Tribunal (SCT) of the DIFC Courts. The hearing took place on 28 August 2023, with both parties in attendance. The final order and the accompanying schedule of reasons were issued on 25 December 2023.
What were the primary legal arguments advanced by MAB and MACE during the proceedings?
The Claimant, MAB, argued that it had fulfilled its contractual obligations up to the final snagging stage. It contended that the Defendant breached the agreement by continuously adding items to the snagging list beyond the seven-day period stipulated in clause 2.4 of the Agreement. The Claimant further alleged that the Defendant’s refusal to agree on a single, mutually binding snagging list, coupled with an alleged hostile work environment, justified the cessation of its work on the premises.
The Defendant, MACE, argued that the work performed was substandard, particularly the tiling, which required extensive rectification. She relied on an independent engineering report to substantiate the defects. Regarding the delay, the Defendant argued that the Claimant’s failure to complete the snagging works within the agreed timeframe forced her to incur additional rental costs and storage fees for her furniture. She sought full compensation for these losses, arguing that the Claimant’s abandonment of the site constituted a material breach of the construction agreement.
What was the central doctrinal question the Court had to resolve regarding the snagging process and contractor liability?
The Court was tasked with determining whether the Claimant’s failure to complete the snagging works constituted a breach of contract that precluded it from claiming the final payment. Specifically, the Court had to decide whether the Defendant’s conduct in providing snagging lists—and the subsequent disagreement over those lists—absolved the contractor of its duty to rectify defects. The doctrinal issue involved the interpretation of the contractual "snagging" mechanism and whether the contractor’s unilateral decision to stop work due to a lack of consensus on the list was legally defensible under the terms of the Agreement.
How did H.E. Deputy Chief Justice Ali Al Madhani apply the test for contractor liability and damages in this construction dispute?
The Court applied a strict interpretation of the contractor’s obligations under the Agreement, finding that the Claimant had failed to fulfill its duty to complete the snagging works. The Judge emphasized that the contractor was provided with reasonable access to the premises and that the refusal to continue work was not justified by the administrative disagreements over the snagging list. The Court held that the Claimant was liable for the defective tiling and the resulting delays.
Regarding the assessment of damages, the Court relied on the evidence provided by the Defendant, including quotes for rectification and documentation of rental expenses. The reasoning process focused on the principle of restorative justice, ensuring the Defendant was placed in the position she would have occupied had the contract been performed correctly. As stated in the judgment:
As I have found that the Claimant is liable for the defective tiles. In this part of the judgment, I shall deal with damages being sought by the Defendant as a result of the Claimant’s breach.
49.
Which specific statutes and RDC rules did the Court reference in its determination of the claim?
The Court’s decision was issued pursuant to Rule 53.61 of the Rules of the DIFC Courts (RDC), which governs the powers of the SCT in issuing judgments and orders. The substantive dispute was governed by the terms of the construction agreement dated 4 December 2021, specifically:
- Clause 2.4: Regarding the seven-day grace period for the Defendant to provide a list of defective items.
- Clause 6.1: Regarding the procedure for the contractor to provide a snagging list.
- Clause 9: Regarding the process for agreeing on variation works.
- Clause 28: Regarding the requirement for a mutually agreed snagging list.
How did the Court utilize the evidence of third-party quotes and expert reports in calculating the quantum of damages?
The Court utilized the Defendant’s evidence to quantify the loss, specifically regarding the tiling defects and the rental costs incurred due to the delay. The Court accepted the Defendant’s submission of a quote from an alternative contractor to establish the cost of rectification. The Court also accepted the Defendant's evidence regarding rental accommodation costs and furniture storage fees, noting that the Claimant failed to provide a credible defense or challenge to these specific figures. The Court’s reliance on these figures is reflected in the following findings:
The Defendant submitted a second quote for this work from an alternate tiler, namely the Madge which provided a quote for a sum of AED 198,943.
51.
She alleges that the cost would amount to AED 8,190 for two months, in addition to the removal costs to move furniture to and from storage, which is estimated to be AED 6,000 based on the Defendant’s previous moving costs, The Claimant raised no defence or challenge to this item, therefore the Defendant is entitled such claim.
61.
What was the final outcome of the litigation and the specific relief granted to the parties?
The Court dismissed the Claimant’s claim for the final payment in its entirety. The Defendant’s counterclaim was partially allowed. The Court ordered the Claimant to pay the Defendant AED 246,732.57 for tiling-related damages and AED 184,627.75 for damages arising from the project delay. Additionally, the Claimant was ordered to pay the DIFC Courts’ filing fee of AED 21,568. The Court concluded that the waiver of the Claimant's sixth payment was sufficient compensation for the Defendant’s losses, stating:
In my view, the decision to waive the Claimant’s sixth payment is proportionate compensation for the Defendant to rectify the damages claimed above and I shall not award her any further payment in this regard.
What are the wider implications of MAB v MACE for construction practitioners in the DIFC?
This judgment serves as a reminder that contractors cannot unilaterally abandon a project simply because of administrative disagreements regarding snagging lists. It underscores the necessity for contractors to maintain clear, evidence-based records and to adhere strictly to the contractual snagging procedures. For practitioners, the case highlights that the SCT will prioritize the substantive completion of works over procedural disputes. Litigants must anticipate that the Court will readily award damages for delay and rectification costs where the contractor fails to provide a robust defense or fails to challenge the specific quantum of the client’s losses.
Where can I read the full judgment in MAB v MACE [2023] DIFC SCT 206?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/mab-v-mace-2023-difc-sct-206. A copy is also available via the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/small-claims-tribunal/DIFC_SCT-206-2023_20231225.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No external precedents cited in the provided judgment text. |
Legislation referenced:
- Rules of the DIFC Courts (RDC), Rule 53.61
- Construction Agreement dated 4 December 2021 (Clauses 2.4, 6.1, 9, 28)