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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Nanette v Neema [2024] DIFC SCT 061 (15 May 2024) URL: http://www.bailii.org/ae/cases/DIFC/2024/DSCT_061.html Cite as: [2024] DIFC SCT 61, [2024] DIFC SCT 061

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Nanette v Neema [2024] DIFC SCT 061

May 15, 2024 SCT - JUDGMENTS AND ORDERS

Claim No: SCT 061/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai

IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE NASSIR AL NASSER

BETWEEN

NANETTE

Claimant

and

NEEMA

Defendant

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Hearing :	7 May 2024
Judgment :	15 May 2024

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JUDGMENT OF H.E. JUSTICE NASSIR AL NASSER

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UPON a Hearing having been listed before H.E Justice Nassir Al Nasser on 7 May 2024, with the Claimant’s and the Defendant’s representatives in attendance

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1. The Defendant shall pay the Claimant the sum of AED 169,579.83 plus interest at the rate of 9% per annum from the date of this Judgment until the date of full payment.

2. The Defendant shall pay the Claimant the Court fee in the sum of AED 8,478.99.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of Issue: 15 May 2024
At: 11am

THE REASONS

Parties

1. The Claimant is Nanette (the “Claimant”), a company registered and located in Dubai, UAE.

2. The Defendant is Neema (the “Defendant”), a company registered and located in Abu Dhabi, UAE.

Background and Procedural History

3. The underlying dispute is in regards to unpaid invoices arising from the hire agreement entered by the Claimant and the Defendant (the “Agreement”).

4. On 5 February 2024, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking payment from the Defendant for alleged unpaid invoices in the amount of AED 646,220.

5. On 13 February 2024, the Defendant filed an Acknowledgment of Service with the intention to defend part of the claim.

6. The parties met for a Consultation with SCT Judge Maitha Al Shehhi on 11 March 2024 and 1 April 2024 but were unable to reach a settlement.

7. On 11 March 2024, the Claimant filed further written submissions to provide a breakdown of the total claim value, which comprises the following:

(a) Unpaid invoices in the sum of AED 126,000;

(b) Unpaid invoice for damages and breakdown of the equipment in the sum of AED 23,579.83;

(c) Late payment fine in the sum of AED 20,000 as stipulated in clause 31 of the terms and conditions; and

(d) Payment of the Court fees and legal interest on the judgment amount at the rate of 9% per annum until the date of full payment.

8. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a Hearing held on 7 May 2024, at which the Claimant’s and the Defendant’s representatives were in attendance.

Claim

9. The Claimant submits that parties entered into the Agreement. The Agreement provides that the Defendant shall rent equipment from the Claimant for a 3 month period, renewable by mutual agreement as defined in the Purchase Order.

10. The Claimant submits that, on 16 October 2023, by way of an email, it sent a letter to the Defendant stating as follows:

“effective from 1 November 2023, the monthly rate for the 860SJ: JLG 28.21m Telescopic Diesel Boomlift will be adjusted to AED 30,000/unit. This adjustment is necessary due to several factors: including the increased purchase price of the unit, extended lead times for equipment acquisition, and the current lack of availability in the market. These changes will automatically reflect on you monthly invoices.

Should you decide to keep the equipment, please send us the revised PO before 1 November 2023.

If you wish to discontinue your hire, please contact our Hire desk and return the equipment by 31 October 2023.”

11. On 18 October 2023, the Claimant sent an email to the Defendant requesting as follows:

“Kindly agree for the same rental charges which we sent the LPO to you, meanwhile we will discuss with my management regarding the revised rental agreement.”

12. On 31 October 2023, by way of an email, the Claimant requested the Defendant to either return the equipment or accept the new rates. On 1 November 2023, the Defendant responded by stating:

“Please give us two weeks’ time to release you manlift(equipment) from Island.”

13. The Claimant submits that the Defendant did not release the equipment nor pay any invoices until the claim was filed.

14. Therefore, the Claimant filed a claim seeking payment of the total sum of AED 646,220 for unpaid invoices, the cost of machinery in case of loss or damage, plus legal interest at the rate of 9% per annum from the date of the Judgment until the date of full payment in addition to costs.

Defence

15. The Defendant denies the claim and submits that the Claimant was aware of the fact that the Defendant was executing a critical project for an extended duration and that the hired equipment was not easily replaceable. With regards to the letter dated 16 October 2023, the Defendant states“we understand the price adjustment may present challenges…should you decide to keep the equipment, please send us the revised PO before 1 November 2023. If you wish to discontinue your hire, please contact our hire desk and return the equipment by 31 October 2023”.

16. The Defendant submits that the Claimant did not give any opportunity to the Defendant to discuss or negotiate the sudden increase in hire charges.

17. The Defendant adds that the decision to ‘hike’ the hire charges was unilateral and unacceptable to the Defendant and it has has never agreed to such increased hire charges to date.

18. The Defendant submits that the Claimant’s conduct shows how they are exploiting hirers such as the Defendant by taking advantage of the fact that the hired equipment was not easily available in the market.

19. The Defendant argues that it has paid all the payments due under the invoices reflecting the original and agreed amount of hire charges in the sum of AED 31,920. The Defendant submits that there are only two disputed remaining invoices that remain unpaid as the Claimant unilaterally hiked the rental charges which were not approved by the Defendant.

20. The Defendant also denies the sum of AED 20,000 claimed as a late payment fine.

21. Therefore, the Defendant submits that the Claimant’s claim for increased rental rate and late payment fine shall be dismissed.

Finding

22. The first issue I shall address is whether the Claimant had the right to increase the hire rent.

23. The Defendant had hired equipment on 21 March 2023 for the works to be performed for the project. The project is scheduled to run until June 2025. I find that the hire commenced on 1 April 2023 after the parties entered into the Agreement on 29 March 2023, and rate was AED 7,600 plus 5% VAT.

24. Thereafter, by way of a letter sent to the Defendant on 16 October 2023, the Claimant increased the hire charges to AED 31,500 inclusive of 5% VAT.

25. The question which arises is whether the Defendant’s performance constituted to an amendment to the Agreement.

26. The letter clearly stated that if the Defendant does not agree with the new rates they should contact the hire office and arrange to return the equipment by 31 October 2023. However, the Defendant failed to return the equipment or pay any rent whether it was the old rate or the new rate until this claim was filed.

27. I find that the Defendant’s failure to return the equipment and its continued to use of the equipment up until 28 February 2024 (being the off hire date), is sufficient to demonstrate that it accepted the new rental rate by its performance.

28. Therefore, I find that the Defendant is liable to pay the Claimant the following invoices:

(a) Invoice dated 30 November 2023 in the sum of AED 31,500;

(b) Invoice dated 30 December 2023 in the sum of AED 31,500;

(c) Invoice dated 31 January 2024 in the sum of AED 31,500; and

(d) Invoice dated 29 February 2024 in the sum of AED 30,833.80.

29. In addition to the above, the Defendant shall also pay the Claimant the sum of AED 23,579.83 in relation to invoice which relates the repair of the equipment in accordance with damages and the breakdown report submitted along with the invoice.

30. In relation to the Claimant’s claim for a late payment fine in the sum of AED 20,000, clause 31 of terms and conditions provides as follows:

“in the event of any hire not being paid to Nanette and a legal process is required to obtain payment, the customer is required to compensate Nanette an additional sum of AED 20,000 for each hire contract that is not paid, and legal recovery is required through the Courts.”

31. The Defendant failed to pay any invoices from the period of July 2023. The payment made by the Defendant was only made after the Claimant filed its claim with the SCT on 5 February 2024. Therefore, I find that the Defendant is liable to pay the Claimant the late payment fine of AED 20,000.

32. In relation to the Claimant’s claim for the sum of AED 499,800 in case of loss or damage to the machinery, I find that the Claimant received its equipment and claimed damages in relation to the equipment which was awarded above. Therefore, as the Claimant has failed to provide the legal basis for its claim for AED 499,800 it shall be dismissed.

33. The Claimant claims the Court fees in the sum of AED 32,311. However, as the Claimant has only been successful in its claim for the sum of AED 169,579.83, it shall only be awarded the Court fees on the amount in which it was successful, being AED 8,478.99.

34. The Defendant shall also pay interest on the Judgment amount at the rate of 9% per annum from the date of this Judgment until the date of full payment.