What is the nature of the dispute between Five Real Estate Development and Reem Emirates Aluminium regarding the AED 26,711.50 cost assessment?
The litigation concerns a protracted procedural battle over costs arising from earlier substantive orders in the Technology and Construction Division. Five Real Estate Development (the Claimant) challenged two specific orders made by the Deputy Registrar on 18 July 2021: an immediate assessment of costs totaling AED 26,711.50 and the issuance of a Default Costs Certificate. The Claimant’s primary contention is that these cost-related orders were procedurally defective, arguing that the Deputy Registrar failed to adhere to mandatory requirements regarding hearings and the filing of Points of Dispute.
The Claimant specifically asserts that the Defendant’s applications for these cost orders were invalid because they requested determinations without a hearing without first securing the necessary consent. Furthermore, the Claimant maintains that the orders were issued in disregard of its own filings. As noted in the Court’s order:
(c) the challenged order is invalid on the ground that the Claimant had filed Points of Dispute on 4 July 2021.
This dispute highlights the high stakes of procedural compliance in construction litigation, where technical errors in cost recovery applications can lead to significant delays and secondary litigation. For further context on the broader procedural history of this case, see the deep editorial analysis at: Five Real Estate Development v Reem Emirates Aluminium [2023] DIFC TCD 009: The High Cost of Procedural Overreach in Construction Disputes. Related orders in this case family include the FIVE REAL ESTATE DEVELOPMENT v REEM EMIRATES ALUMINIUM [2021] DIFC TCD 009 — Leave to file counterclaim (02 February 2021), the FIVE REAL ESTATE DEVELOPMENT v REEM EMIRATES ALUMINIUM [2021] DIFC TCD 009 — Immediate judgment on FIDIC-based claims (04 May 2021), the FIVE REAL ESTATE DEVELOPMENT v REEM EMIRATES ALUMINIUM [2021] DIFC TCD 009 — Dismissal of strike-out application regarding FIDIC determination (31 May 2021), the FIVE REAL ESTATE DEVELOPMENT v REEM EMIRATES ALUMINIUM [2021] DIFC TCD 009 — Dismissal of appeal against strike out and amendment nullification (08 June 2021), and the FIVE REAL ESTATE DEVELOPMENT v REEM EMIRATES ALUMINIUM [2021] DIFC TCD 009 — Default Costs Certificate (28 July 2021).
Which judge presided over the procedural directions in TCD 009/2020 on 22 September 2021?
Justice Sir Richard Field presided over this matter in the Technology and Construction Division of the DIFC Court of First Instance. The order was issued on 22 September 2021, following the Claimant’s applications to set aside the Deputy Registrar’s cost orders from July 2021.
What were the specific legal arguments advanced by Five Real Estate Development and Reem Emirates Aluminium regarding the Deputy Registrar’s cost orders?
The Claimant, Five Real Estate Development, argued that the Deputy Registrar’s orders were procedurally flawed on three main grounds. First, it contended that the Defendant’s applications for immediate assessment and the Default Costs Certificate were of no effect because they sought orders without a hearing without obtaining the Claimant’s consent, in violation of RDC 23.75. Second, the Claimant argued that if the Deputy Registrar acted on her own initiative, she breached RDC 4.12 and 4.13 by failing to hold a hearing. Finally, the Claimant asserted that the orders were invalid because it had already filed Points of Dispute on 4 July 2021, which should have precluded the issuance of a default certificate.
The Defendant, Reem Emirates Aluminium, maintained that the Deputy Registrar was entitled to issue the orders because the Claimant failed to respond to the Defendant’s applications within the 21-day window or seek a stay of the cost assessment proceedings. Furthermore, the Defendant argued that the Claimant failed to follow the correct mechanism for challenging the Deputy Registrar’s orders, which, according to the Defendant, required an application for a De Novo review under Practice Direction No. 3 of 2015 within three working days of the order.
What was the precise doctrinal issue the Court had to address regarding the validity of the Deputy Registrar’s cost assessments?
The Court had to determine whether the Deputy Registrar’s cost-related orders were procedurally valid or if they were rendered void by non-compliance with the Rules of the DIFC Courts (RDC). Specifically, the Court needed to resolve the tension between the Defendant’s assertion that the Claimant waived its right to contest the costs by failing to respond within 21 days, and the Claimant’s assertion that the underlying applications were fundamentally flawed due to the lack of a hearing and the existence of filed Points of Dispute. The Court also had to determine the correct procedural pathway for challenging a Deputy Registrar’s order, specifically whether the requirements of Practice Direction No. 3 of 2015 regarding De Novo reviews were satisfied.
How did Justice Sir Richard Field structure the reasoning for the procedural directions issued in this case?
Justice Sir Richard Field adopted a structured approach to resolve the impasse, requiring both parties to file formal submissions addressing the specific procedural failures alleged by the Claimant. By breaking down the arguments into four distinct issues for each application, the Court ensured that the legal debate remained focused on the RDC compliance rather than the merits of the underlying construction dispute.
The Court’s reasoning focused on whether the Deputy Registrar’s decision-making process adhered to the RDC’s requirements for hearings and whether the Claimant’s prior filings were appropriately considered. The Court mandated a strict timeline for the parties to exchange arguments, ensuring that the Claimant had the final word on its reliance on the Points of Dispute. As specified in the order:
The Claimant must serve its submissions in reply within 7 days of receiving the submissions served by the Defendant and must indicate whether in respect of its said application it intends to rely on the Points of Dispute dated 14 June 2021.
This approach forces the parties to clarify their positions on the procedural timeline, effectively narrowing the scope of the dispute before the Court makes a final determination on whether to set aside the cost orders.
Which specific RDC rules and Practice Directions were central to the Court’s inquiry into the validity of the cost orders?
The Court’s inquiry centered on the application of RDC 23.75, which governs the requirements for requesting orders without a hearing, and RDC 4.12 and 4.13, which dictate the Court’s obligations when acting on its own initiative. Additionally, the Court referenced Practice Direction No. 3 of 2015, which outlines the mechanism for seeking a De Novo review of a Registrar’s order. The Court also examined the timeline for responding to cost assessment applications, specifically the 21-day period for filing a response or seeking a stay, to determine if the Deputy Registrar acted within her authority when issuing the Default Costs Certificate.
How did the Court utilize the cited authorities to frame the procedural directions?
The Court did not rely on external case law in this order, but rather strictly applied the internal procedural framework of the DIFC Courts. The cited RDC rules were used as the benchmark for evaluating the Deputy Registrar’s conduct. By requiring the parties to address whether the Defendant breached RDC 23.75 by failing to secure consent for a paper hearing, the Court used the rules as a diagnostic tool to determine if the procedural foundation of the cost orders was sound. The reference to Practice Direction No. 3 of 2015 served to test whether the Claimant’s challenge was procedurally timely, highlighting the Court’s emphasis on strict adherence to the prescribed review mechanisms.
What was the outcome of the 22 September 2021 order and what specific directions were issued to the parties?
The Court did not set aside the orders immediately but instead issued comprehensive procedural directions requiring both parties to file submissions on the validity of the Deputy Registrar’s actions. The Defendant was ordered to serve submissions within seven days addressing the Claimant’s allegations of procedural breaches, the entitlement of the Deputy Registrar to issue the orders, and the appropriateness of the review mechanism used. The Claimant was then granted a further seven days to serve its reply. The Court also directed the parties to address whether the applications should be determined with or without a hearing, effectively keeping the door open for further oral argument if necessary.
What are the wider implications of this order for practitioners handling cost assessments in the DIFC?
This order serves as a stark reminder that procedural precision is paramount when seeking cost assessments or default certificates in the DIFC. Practitioners must ensure that any request for a paper hearing complies strictly with RDC 23.75, including the requirement to secure the opposing party’s consent. Failure to do so, or failure to acknowledge the filing of Points of Dispute, can lead to the Court scrutinizing the validity of the resulting orders, potentially resulting in their being set aside. Furthermore, practitioners must be vigilant regarding the strict timelines for seeking a De Novo review under Practice Direction No. 3 of 2015. Litigants must anticipate that the Court will prioritize procedural regularity over the speed of cost recovery, and any deviation from the RDC will be met with rigorous procedural directions.
Where can I read the full judgment in Five Real Estate Development v Reem Emirates Aluminium [2021] DIFC TCD 009?
The full order 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-5 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/technology-and-construction-division/DIFC_TCD-009-2020_20210922.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | N/A |
Legislation referenced:
- RDC 4.12
- RDC 4.13(1) & (2)
- RDC 23.75
- Practice Direction No. 3 of 2015