This order addresses the procedural finality of a struck-out claim and the subsequent inability of a claimant to seek amendments to a non-existent cause of action.
What was the specific dispute between Five Real Estate Development and Reem Emirates Aluminium that led to the dismissal of the amendment application?
The litigation originated from a construction dispute where the Claimant, Five Real Estate Development, sought to amend its Particulars of Claim to include new heads of loss, specifically an indemnity claim regarding project owner liabilities and damages for construction defects. However, this application was overtaken by a prior Strike Out Application filed by the Defendant, Reem Emirates Aluminium, on 15 March 2021. The Court granted the strike out, effectively terminating the Claimant’s original action.
Following the strike out, the Claimant attempted to force a ruling on its pending amendment application, arguing that the Court had failed to provide sufficient reasons for not addressing it. The Court clarified that the amendment application was procedurally dead the moment the underlying claim was extinguished. As the Court noted:
A claim that has been struck and therefore no longer exists cannot be subsequently amended.
The dispute essentially boiled down to the Claimant’s refusal to accept that a procedural application to amend cannot survive the total destruction of the main claim. For further context on the procedural history of this matter, see FIVE REAL ESTATE DEVELOPMENT v REEM EMIRATES ALUMINIUM [2021] DIFC TCD 009 — Leave to file counterclaim (02 February 2021).
Which judge presided over the TCD 009/2020 application for permission to appeal and in which division was it heard?
The application for permission to appeal was heard by Justice Sir Richard Field, sitting in the Technology and Construction Division (TCD) of the DIFC Courts. The order was issued on 8 June 2021.
What were the specific legal arguments advanced by Five Real Estate Development and Reem Emirates Aluminium regarding the status of the amendment application?
Five Real Estate Development argued that the Court had a mandatory obligation to provide a formal, reasoned judgment specifically addressing why the amendment application was not being heard. The Claimant relied on various authorities and the Arab Charter of Human Rights to contend that the Registry’s correspondence was insufficient and that the Court’s failure to issue a supplemental judgment on the amendment application was a procedural error.
Reem Emirates Aluminium, conversely, maintained that the strike out of the entire claim rendered the amendment application moot. The Defendant argued that the Claimant’s persistence in seeking a ruling on the amendment was "hopelessly devoid of merit" and a waste of judicial resources. The Defendant successfully contended that the Claimant’s proper course of action was either to appeal the original Strike Out Order or to commence a fresh claim, rather than attempting to revive a nullified application.
What was the precise doctrinal question Justice Sir Richard Field had to answer regarding the maintainability of an amendment application after a strike out?
The Court had to determine whether an application to amend Particulars of Claim remains a live, justiciable issue once the primary claim has been struck out by a court order. The doctrinal issue centered on whether the "life" of an amendment application is strictly contingent upon the existence of the underlying claim, or if it possesses an independent procedural existence that requires a formal, reasoned dismissal even after the main action has been extinguished.
How did Justice Sir Richard Field apply the "real prospect of success" test to the Claimant's appeal?
Justice Sir Richard Field applied the test derived from Barclays Bank plc et al v Essar Global Fund Ltd [2016] DIFC CFI 036, which dictates that a "real" prospect of success requires a "realistic" rather than a "fanciful" prospect. The Judge concluded that because the amendment application was nullified by the Strike Out Order, the appeal against the dismissal of that application had no legal foundation. The Judge emphasized that the interests of justice did not require a formal, reasoned decision on an application that was logically impossible to grant. As the Court stated:
In my judgment, the interests of justice plainly did not require a reasoned decision of the Court declining to proceed with the Amendment Application.
The Court further noted that the Registry’s communication, while not perfectly phrased, clearly signaled that the claim no longer existed and that the Claimant should either appeal the strike out or file a new claim.
Which specific DIFC RDC rules and English precedents were applied to determine the validity of the appeal?
The Court relied on RDC r. 44.19, which governs the criteria for granting permission to appeal, specifically requiring that an appeal must have a "real prospect of success" or some "other compelling reason" to be heard. In assessing the merits of the Claimant's position, the Court referenced Swain v Hillman [1999] EWCA Civ 3053, a foundational English authority regarding the threshold for summary judgment and the necessity of a realistic case.
How did the Court use the cited authorities to justify the dismissal of the Claimant's application?
The Court used Swain v Hillman to reinforce the standard that the Court must filter out claims or appeals that lack a realistic basis. By citing Barclays Bank plc et al v Essar Global Fund Ltd, the Court underscored that the Claimant’s insistence on a reasoned judgment for a nullified application was "fanciful." The Court utilized these precedents to demonstrate that the Claimant’s procedural strategy was an attempt to litigate a non-existent claim, thereby failing the "real prospect of success" test required by RDC r. 44.19.
What was the final outcome and the specific costs order made against Five Real Estate Development?
The Court dismissed the application for permission to appeal in its entirety. Furthermore, the Court ordered the Claimant to pay the Defendant’s costs on an indemnity basis, subject to an immediate summary assessment by the Registrar. The Court’s order regarding costs was explicit:
The Defendant was entitled to serve the submissions it relied on in opposing the application and in my judgment the application is so hopelessly devoid of merit that the Claimant should pay the Defendant’s costs on the indemnity basis such costs to be the subject of an immediate summary assessment by the Registrar.
How does this ruling change practice for litigants in the DIFC Technology and Construction Division?
This case serves as a stern warning against "procedural persistence" in the face of a strike out. Practitioners must recognize that once a claim is struck out, all ancillary applications—such as amendments—are automatically nullified. The ruling clarifies that the Court will not entertain requests for reasoned judgments on applications that have become moot. Litigants are now on notice that if they wish to pursue claims after a strike out, they must either successfully appeal the strike out order itself or initiate a fresh claim, provided the new claim is not barred by res judicata. Failure to follow this path, and instead pursuing "hopelessly devoid of merit" applications, will likely result in indemnity costs.
Where can I read the full judgment in Five Real Estate Development v Reem Emirates Aluminium [2021] DIFC TCD 009?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/technology-and-construction-division/tcd-009-2020-five-real-estate-development-llc-v-reem-emirates-aluminium-llc-2 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/technology-and-construction-division/DIFC_TCD-009-2020_20210608.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Swain v Hillman | [1999] EWCA Civ 3053 | Applied to define the threshold for a "real" prospect of success. |
| Barclays Bank plc et al v Essar Global Fund Ltd | [2016] DIFC CFI 036 | Used to distinguish between "realistic" and "fanciful" prospects of success. |
Legislation referenced:
- RDC r. 44.19 (Permission to appeal)
- Arab Charter of Human Rights (Cited by Claimant regarding the right to a reasoned judgment)