Appeal in Cassation No. 84 and 178 of 2020 Commercial
Issued on 07/04/2020
Court Panel: Presided by Judge Shehab Abdu Rahman Al Hamadi - Chief Judge of the Circuit - with the membership of judges Abdullah Bu Bakr Al Siri and Sabri Shamseddin Mohammed.
1- The Trial Court estimating the adequacy of the reasons of termination or cancellation of the contract binding both parties or the inadequacy thereof, considering the contractor negligent or not negligent or denial of negligence by the person requesting cancellation or proof of the same, and determining the negligent party in the performance of its obligations or rejection of negligence.
2- Evacuation basis.
3- Entitlement of the rent upon handing over of the premises in a way enabling the Lessee or the investor to fully use the leased premises or prepare the same in case of investment for the purpose contracted upon.
4- Considering the contested judgment ruling to rescind the lease contract because the Lessee did not pay the rent as defective for miscarriage of justice, as the Lessor did not enable the Lessee to use the leased land as per the report of the expert appointed before the Court of First Instance for the presence of equipment that were occupying the land and for not paying the Municipality fees, which allows to seize the rent or a part thereof from the Lessor.
Contract “cancellation”. Lease. Investment. Evacuation. Rent. Trial Court “its discretion”. Judgment “miscarriage of justice”. Reversal “of the accepted grounds”.
- Estimating the adequacy of the reasons of termination or cancellation of the contract binding both parties or the inadequacy thereof, considering the contractor negligent or not negligent or denial of negligence by the person requesting cancellation or proof of the same, and determining the negligent party in the performance of its obligations or rejection of negligence. Objective. Based on valid reasons.
- The point of evacuation is that the Lessee or investor did not pay the fee or investment amount due to the owner.
- The rent shall not be due unless upon handing over of the premises in a way enabling the Lessee or the investor to fully use the leased premises or prepare the same in case of investment for the purpose contracted upon.
- Example of miscarriage of justice in rescinding the lease contract for not paying the rent.
Whereas it is legally prescribed that the estimation of adequacy of the reasons of termination or cancellation of the contract binding both parties or the inadequacy thereof, considering the contractor negligent or not negligent or denial of negligence by the person requesting cancellation or proof of the same, and determining the negligent party in the performance of its obligations or rejection of negligence as per the factual matters that the Court shall estimate whenever its estimation is based on the lawsuit evidence and inference of the facts thereof. Furthermore, the point of evacuation is that the Lessee or investor did not pay the fee or investment amount due to the owner. Concerning the basis of obligation and the extent thereof is ruled by public rules stating that the fee or investment amount is only through handing over of the premises in a way enabling the Lessee or investor to fully use the premises or prepare it in case of investment for the purpose thereof, and to be delivered without impediment. However, if the Lessor or owner prevent the same and did not use the method achieving the same, then there shall be no due fee or investment amount and the Lessor or owner shall not have the right to request evacuation. Thus, whereas the contested judgment concluded that the Respondent did not enable the Appellants to take over the leased land, as per the report of the appointed expert before the Court of First Instance, due to the presence of equipment that were occupying the land and or not paying Municipality fees since 2007 for Fujairah Municipality. Thus, the Appellants Lessees shall have the right to seize the fee or a part thereof from the Respondent Lessor and the latter shall not have the right to rescind the lease contract, basis of the lawsuit and evacuation. Whereas the contested judgment violated this consideration and ruled cancellation and evacuation, stating that both parties violated their obligations, the Lessee by not paying the rent and the Lessor by not enabling the Lessee to use the leased land, then it erred in the application of the Law then it shall be reversed.
The Court,
Whereas, in the facts - as apparent in the contested judgment and the documents - the Appellant in the appeal in cassation no. 178 of 2020 Commercial, filed lawsuit no. 300 of 2017 Civil Plenary Fujairah against the Respondents, requesting the judgment, as per his final requests, to cancel the lease contract dated 22/4/2015 and evacuate the Defendants from the land covered by the dispute and hand it over to him, compelling them jointly to pay the amount of AED 744,750 as the value of rent fees due from 22/4/2015 to 21/4/2018 and to compel them to pay the amount of AED 730,733 as the value of the fee due to the Municipality of Fujairah from 22/4/2013 to 13/12/2018. This is based on the fact that the Respondents concluded with his father the said lease contract for the plot of land at Al-Hail Industrial City in Fujairah for the purpose of investment for a period of 12 years, at a rent fee of AED 175,000 for the first and second year, to be increased to AED 225,000 for the third year and from the fourth year, the rent shall be exceeded by 10% of the rental value due for every year. The Defendants shall pay the fees of usufruct of the land due to Fujairah Municipality throughout the validity period of the lease contract as the land is owned by Fujairah Municipality and the father uses the same under a usufruct contract between him and the Municipality. As the Defendant Lessees violated their obligation to pay the due fee for the claim period without justification, he filed his lawsuit with the above-mentioned requests. The Respondents filed a counterclaim under No. 357 of 2017 Civil Plenary Fujairah against the Respondent, requesting the ruling, as per their final requests, to compel the Appellant to pay the amount of AED two million representing the amount of rent of the electrical generator and rent of the land-occupying equipment and compensation for the damages incurred due to not using the rented land. The Court of First Instance appointed an expert in the lawsuit and ruled in the first original lawsuit to compel the Defendants to pay to the Plaintiff, in his capacity, an amount of AED 275,000 and in the counterclaim to compel the Defendant to pay to the Plaintiffs an amount of AED 957,000 with effect from 01/05/2018 until the date of final judgment, enabling the Plaintiffs to use the premises and extract the building completion certificate. Both parties appealed the judgment. On 07/01/2020, the Court of Appeal ruled, in the appeal no. 351 of 2018 Civil Fujairah brought by the Appellant, to cancel the ruling of the appealed judgment in the original lawsuit as per the rejection of the rescind request, evaluation and re-ruling of the cancellation of the lease contract covered by the lawsuit dated 22/4/2013 and compel the Respondents to evacuate the leased land and hand it over to the Appellant empty and to confirm it otherwise; and to cancel the ruling of the appealed judgment in the counterclaim enabling the Respondents to use the leased premises and to reject it and amend the ruled amount to AED 457,000, and in the appeal no. 352 of 2018 Civil Fujairah brought by the Respondents, to reject it. Both parties appealed this judgment through cassation hereby and whereas the appeal in cassation was submitted to this Court in a Council Chamber, the latter deemed that it is worthy of consideration and specified a hearing for the same.
First: Appeal in Cassation No. 84 of 2020 Commercial:
Whereas the Appellants in cassation object to the contested judgment for miscarriage of justice and deficiency in reasoning. As the contested judgment approved the report of the expert appointed before the Court of First Instance concluding that the Respondent did not enable the Appellants to use the leased land because of the equipment occupying such land and for not paying the Municipality fees due since 2007 to Fujairah Municipality. Whereas the judgment based its ruling of cancellation and evacuation on the basis that each of the parties violated their obligation, the Respondent, by not enabling them to use the land and the Appellants by not paying the due rent while they are obliged to pay it due to the violation by the Respondent to its obligation, enabling them to use the leased land. They also owe the Respondent with the ruled amount in their counterclaims, which exceeds the due rent and to make set-off between the entitlements of both parties so that they are not liable, which renders the judgment invalid and shall be reversed.
Whereas this objection is valid, as it is legally prescribed that the estimation of adequacy of the reasons of termination or cancellation of the contract binding both parties or the inadequacy thereof, considering the contractor negligent or not negligent or denial of negligence by the person requesting cancellation or proof of the same, and determining the negligent party in the performance of its obligations or rejection of negligence as per the factual matters that the Court shall estimate whenever its estimation is based on the lawsuit evidence and inference of the facts thereof. Furthermore, the point of evacuation is that the Tenant or investor did not pay the fee or investment amount due to the owner. Concerning the basis of obligation and the extent thereof is ruled by public rules stating that the fee or investment amount is only through handing over of the premises in a way enabling the Lessee or investor to fully use the premises or prepare it in case of investment for the purpose thereof, and to be delivered without impediment. However, if the Lessor or owner prevent the same and did not use the method achieving the same, then there shall be no due fee or investment amount and the Lessor or owner shall not have the right to request evacuation. Thus, whereas the contested judgment concluded that the Respondent did not enable the Appellants to take over the leased land, as per the report of the appointed expert before the Court of First Instance, due to the presence of equipment that were occupying the land and or not paying Municipality fees since 2007 for Fujairah Municipality. Thus, the Appellants Lessees shall have the right to seize the fee or a part thereof from the Respondent Lessor and the latter shall not have the right to rescind the lease contract, basis of the lawsuit and evacuation. Whereas the contested judgment violated this consideration and ruled cancellation and evacuation, stating that both parties violated their obligations, the Lessee by not paying the rent and the Lessor by not enabling the Lessee to use the leased land, then it erred in the application of the Law then it shall be reversed, along with referral, without the need to discuss the rest of the grounds of appeal.
Second: Appeal in Cassation No. 178 of 2020 Commercial:
Whereas the reasons of this appeal in cassation are related to the defect of the report of the appointed expert before the Court of First Instance that the contested judgment relied upon for not using the leased land by the Respondents. The Appellant objects as well to the ruled amount as a fee for the items stored in the land. Whereas the contested judgment was reversed in the previous appeal in cassation then the appeal thereof shall entail reversal for being related to both appeals.

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