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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Neva v Natalie [2024] DIFC SCT 115 (14 June 2024) URL: http://www.bailii.org/ae/cases/DIFC/2024/DSCT_115.html Cite as: [2024] DIFC SCT 115

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Neva v Natalie [2024] DIFC SCT 115

June 14, 2024 SCT - JUDGMENTS AND ORDERS

Claim No: SCT 115/2024

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

BETWEEN

NEVA

Claimant

and

NATALIE

Defendant

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Hearing :	7 May 2024
Judgment :	14 June 2024

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JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI

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UPON the Claimant’s claim filed on 14 March 2024

AND UPON a hearing having been held before H.E. Justice Maha Al Mheiri on 7 May 2024, with the Claimant’s and the Defendant’s representative in attendance

AND UPON reviewing the documents and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1. The Claimant’s Claims are dismissed.

2. There shall be no order as to costs.

Issued by:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of issue: 14 June 2024
At: 2pm

THE REASONS

The Parties

1. The Claimant is Neva (the “Claimant”), an individual residing in Sudan.

2. The Defendant is Natalie (hereafter “the Defendant”), a law firm registered in Fujairah, UAE.

Background and the Preceding History

3. The underlying dispute arises over the recovery of paid fees for legal services set out in the letter of engagement dated 8 August 2023 (the “Agreement”) signed between the parties.

4. On 14 March 2024, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking:

(a) A refund of the amount AED 70,500 for legal fees paid to the Defendant;

(b) Payment of Interest to the amount of 9% per annum, pursuant to Practice Direction 4 of 2017;

(c) Costs; and

(d) Any other applicable relief that the Court may deem appropriate.

5. On 21 March 2024, the Defendant filed an acknowledgment of service setting out his intention to defend the whole claim.

6. The matter was called for a Consultation before SCT Judge Maitha Al Shehhi on 24 April 2024. Although both of the parties were in attendance, they failed to reach a settlement.

7. In accordance with the rules and the procedures of the SCT, the matter was referred to me for determination. A hearing was held on 7 May 2024 (the “Hearing”) with both parties and their representatives in attendance. After reviewing all documents and evidence submitted on the Court file, I give my judgment below.

The Claim

8. The Claimant sought to initiate legal proceedings in the UK (the “Claimant’s UK Case”). The Claimant underwent prior review of the details of the Claimant’s UK Case by a barrister, obtaining a comprehensive legal opinion dated 26 October 2022 (the “Opinion”), and subsequently issued a pre-action protocol letter.

9. The Opinion advised that the prospects for successfully recovering the claimed sum were severely restricted in the Claimant’s UK Case, due to the elapsed limitation period and the insufficient evidence. As a result, the Claimant did not instruct the barrister on these proceedings.

10. The Claimant connected with the Defendant through Mrs. Nora , a previous work colleague of the Defendant. The Claimant retained the Defendant for legal services to secure representation in anticipation of proceedings to be instituted within the High Court of England and Wales. These proceedings are associated with a limitation period.

11. In addition to the Opinion in relation to the Claimant’s UK Case, the Defendant also reviewed the Claimant’s UK Case and put a strategy to circumvent the limitation issue. The Defendant proposed a meeting to further deliberate on the engagement details.

12. On 2 August 2023, the Defendant forwarded his terms of engagement, proposing a fee of AED 188,000 for the following scope of work under Clause 1 of the Agreement, which states:

“1. SERVICES & SCOPE OF WORK

Legal representation, in conjunction with Norman of law firm in Dubai, on behalf of the Client in relation to the ongoing dispute with Norris, Nadir and others, including:

• Assisting Ms Nixie in dealing with all correspondence and liaising with the Client
• Assisting Ms Nixie in instructing experts as maybe necessary
• Assisting Ms Nixie in preparing witness statements
• The Firm is to instruct Nessim from London to act in and conduct proceedings to be undertaken in the High Court, London, including:
• Advising the Client
• Pre-action protocol
• Drafting pleadings, letters, etc
• Case management hearing
• Making or dealing with any applications as maybe necessary including disclosure
• Pre-hearing conference
• Preparation for and conduct of the hearing including the opening and closing statements
• Preparation for and conduct of costs hearing.”

13. The Defendant opted for a fixed rate, and pursuant to Article 3 of the Agreement the Defendant charged the Claimant a professional fee (the “Fees”) to perform the services as set out below:

“3, FEES

Our charges are based on the cost of the time required for the work and what is fair and reasonable to all parties depending on circumstances. In relation to the work described in Clause 1 above, please find our agreed fees as follows:

To conduct the proceedings based on fixed lump sum fee of: AED 188,000

Payment to be made in the following installments:

50% upon entering into this agreement

25% on completion of the pleadings

25% prior to the substantive hearing in this matter

If a settlement agreement is reached 100% of the fees, as above, will remain payable.”

14. The Parties agreed to the following payment plan contained in the terms of the Agreement under Clause 9 (the “Payment Plan”):

“9, PAYMENT

All invoices should be settled within seven (7) days of the invoice date.”

15. Although the Agreement was signed on 27 August 2023, the first invoice was not paid until 27 September 2023. Despite signing the Agreement, the Claimant argues that he delayed the execution of the Agreement and the consequent payment obligations due to financial difficulty that the Defendant was aware of on or around 17 August 2023.

16. On 11 October 2023, the Defendant shared a Pre-action Protocol letter using parts of the original barrister’s letter, and proposed engaging a patent expert, significantly increasing the projected costs for legal representation. Due to the unexpectedly high costs, the Claimant opted to withdraw on 28 December 2023, requesting the termination of the Agreement and a refund of the fees already paid. The Defendant declined to issue any refund, referring to the Agreement's stipulation that the fees are non-refundable.

The Defence

17. The Defendant argues that the time was limited, and it was imperative that the work to prepare the papers in this Claimant’s UK Case should be as advanced as soon as possible to avoid the potential limitation issue. The Defendant adds that he was never asked to stop proceeding with case preparation. Had the Defendant not acted as swiftly as he did, the limitation period would have expired, therefore potentially prompting the Claimant to find the Defendant professionally negligent. Therefore, the allegation that the Defendant was carrying out work without instruction is firmly rejected.

18. The Defendant further argues that the ‘timesheet’ presented as evidence supports the submission that the time spent on draft pleadings was not excessive, as 7.5 hours of preparation does not exceed a single working day.

19. Furthermore, the Defendant refutes the Claimant’s submission that the time record was “manufactured” and does not give rise to any legitimate concerns about the work the Defendant was carrying out. The time record shows that the Defendant had been conservative in his work whilst being conscientious of the time pressures that were self-evident and known by Mrs Nora and the Claimant in relation to the claim.

20. The Defendant continues to submit that the time record provided clearly shows the work carried out, and that the Fee is not dependent on the whole of the works having been completed; the Claimant’s interpretation of the Agreement is therefore misleading. The argument that the payments are dependent on each stage being completed is incorrect. The payments are instalments, not stage payments. The choice of when the instalments were to be made could not be based on calendar dates, as the length of time that the works would extend over could not be known by the Claimant, Mrs Nora or the Defendant. Accordingly, the identifiable stages were used to provide times when the agreed instalments were to be paid. The first instalment was due on signing the Agreement.

Discussion

21. This dispute is governed by the DIFC Contract Law and the relevant case law and principles concerning a breach of contract. Neither party has disputed the jurisdiction of the DIFC Courts and thus the Court assumes jurisdiction of this dispute. Clause 12 of the Agreement stipulates the following:

“12. GOVERNING LAW & JURISDICTION

These Terms shall be governed by and construed in accordance with the Laws of Dubai, United Arab Emirates without regard to its conflict of law doctrine. The Parties agree to submit any and all disputes arising out of or in connection with these Terms to the exclusive jurisdiction of the DIFC Courts..”

22. In essence, the disagreement between the parties pertains to whether the Claimant should be refunded for the amount that he paid pursuant to the Agreement.

23. In my view, the Agreement between parties is clear as to the Fees as stated in Paragraph 13 and 14 of this Judgment, and the Claimant is clearly obligated to pay the Claimant the Fees in accordance with the payment plan. The terms were agreed before signing the Agreement, and the Defendant’s legal obligations to deliver commenced with the signing of the Agreement in August and not when the fees were paid in September.

24. In review of the submissions made by both parties, I find that the Defendant complied with, and performed, several activities in accordance with the Agreement. As evidence in the time sheet provided by the Defendant, the Fees for the services provided are charged on a fixed sum.

25. The Claimant did not provide any evidence to support that he gave instructions to not commence with the Agreement. Furthermore, the limitation barrier in the Claimant’s UK Case was a risk the Defendant appropriately sought to circumvent so that he was able to perform his contractual duties properly.

26. The payment structure was not based on time spent and thus the payment is non-refundable. The timesheet submitted indicating fees of AED 103,500 at an hourly rate of AED 2,000 was presented as evidence to support work done on the contractual obligations under the Agreement.

27. Furthermore, the Claimant was aware of the Defendant’s charges when signing the Agreement. Therefore, I find that the Defendant has performed its contractual obligations under the Agreement which entitles it to the amount in the sum AED 94,000.

28. The Claimant also seeks to recover the fee that was paid to the Court for the filing of this Claim. I am of the view that, as the Claimant has been unsuccessful on their claims, they are not entitled to recover the Court filing fee.

Conclusion

29. In light of the aforementioned, I find that the Claimant’s claims are dismissed.

30. There shall be no order as to costs.