Claim No: CFI 086/2021
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE COURT OF FIRST INSTANCE
BETWEEN
MAANAV
Claimant / Respondent
and
MALVIKA
Defendant / Appellant
JUDGMENT OF H.E. JUSTICE ALI Al MADHANI
| Hearing : | 19 January 2022 |
|---|---|
| Counsel : | Sophia Hurst instructed by Mahmoud Hussain Law Firm for the Defendant/Appellant Antonios Dimitracopoulos of BSA Ahmad Bin Hezeem & Associates LLP for the Claimant/Respondent |
| Judgment : | 7 July 2022 |
ORDER
UPON reviewing the judgment of H.E. Justice Nassir Al Nasser in Claim No. SCT-222-2021 dated 20 October 2021 (the“Judgment”)
AND UPON considering the Defendant’s claim in the Court of First Instance under Claim No. CFI-087-2021 (the“CFI Proceedings”)
AND UPON reviewing the Defendant’s appeal against the Judgment (the“Appeal”)
AND UPON hearing counsel for the Defendant and counsel for the Claimant at the hearing held on 19 January 2022
AND UPON considering the Defendant’s supplementary submissions and the Claimant’s supplementary submissions filed on 2 February 2022 and 16 February 2022, respectively.
AND UPON the order with reasons of H.E. Justice Ali Al Madhani dated 21 April 2022 (the“Reasons”)
IT IS HEREBY ORDERED THAT:
1. The Appeal is allowed.
2. Paragraph 1 of the Judgment is varied to provide that the Defendant shall pay the Claimant the sum of AED 295,480.95, comprising:
i. AED 15,780.82 in respect of unpaid salary;
ii. AED 44,186.28 in respect of end of service gratuity;
iii. AED 120,000 payment in lieu of notice period;
iv. AED 15,360 payment in lieu of annual leave; and
v. AED 54,000 payment in lieu of air tickets.
3. Paragraphs 1 (as varied) and 2 of the Judgment are stayed pending final determination of the CFI Proceedings, with liberty afforded to either party to apply.
4. Liberty is afforded to the Claimant to apply to the SCT, in the event that the Final Salary Issue (as defined in the Reasons) is finally determined in his favour in the CFI Proceedings, for a summary determination that the following amounts are additionally payable to him:
i. AED 13,808.18 in respect of unpaid salary;
ii. AED 59,278.72 in respect of end of service gratuity;
iii. AED 105,000 payment in lieu of notice period; and
iv. AED 13,439.93 payment in lieu of annual leave.
Issued by:
Nour Hineidi
Registrar
Date of issue: 7 July 2022
Time: 4pm
JUDGMENT
Introduction
1. This is my second and final decision in the Appeal. It follows responses to an invitation in the First Decision for the parties to file further written submissions proposing a course which would result in the Appeal being dealt with in accordance with the Overriding Objective of the RDC to the greatest extent possible. The problem I and subsequently the parties addressed is explained in the First Decision. This decision continues from that decision and the definitions used there are adopted here also.
2. In opposition to the Appeal, the Claimant made several procedural objections which in my view raise issues of general importance to appeals from the SCT (the“Procedural Issues”). I will address each of the Procedural Issues first before dealing with the Appeal’s substantive issues (the“Substantive Issues”) second.
The Procedural Issues
3. The Claimant makes five objections to the Appeal of a procedural nature, namely that:
i. first, the Defendant’s application for permission to appeal (the“Permission Application”) was decided in the appeal court, i.e. in the CFI, by the judge who gave the Judgment in the SCT, i.e. the Judge (the“Same Judge Issue”);
ii. second, the Appeal was incapable of being allowed according to the test set out in RDC r. 44.118 and so permission to appeal should not have been granted to the Defendant (the“Appeal Test Issue”);
iii. third, the Defendant did not file a skeleton argument with its appellant’s notice in accordance with RDC r. 44.29 (the“Skeleton Argument Issue”);
iv. fourth, the Claimant was not afforded an opportunity to respond to the Permission Application before the application was decided (the“No Opportunity to Respond Issue”); and
v. fifth, it is not clear from the Permission Order whether the Defendant was given permission to appeal anything other than the Final Salary Issue, while the Defendant has subsequently challenged the Judgment on other grounds (the“Extent of the Appeal Issue”).
4. The Claimant’s procedural objections give rise to a further and overarching issue, namely the question whether and if so to what extent Part 44 of the RDC applies to appeals from the SCT (the“Applicable Rules Issue”). It is convenient to decide this overarching issue first.
The Applicable Rules Issue
5. On 6 June 2021, the former Part 53 of the RDC (the“Former Part 53”) was replaced by the current version (the“Current Part 53”or“Part 53”) pursuant to DIFC Courts Rules of Court Order No. 2 of 2021 (the“Court Order”). Under the Former Part 53, and RDC r. 53.7(10) thereof in particular, appeals from the SCT were governed by Part 44 of the RDC:
53.7
The following Parts of the RDC shall apply to small claims except to the extent that a Rule limits such application or the SCT Judge orders otherwise: …
(10) Parts 44 to 52.
RDC r. 53.75 of the Former Part 53, the first rule under the heading ‘Appeals,’ confirmed also that “RDC Part 44 deals with appeals.”
6. Under the Current Part 53, Part 44 is not included in the list of RDC parts which apply to small claims at RDC r. 53.7. The Current Part 53 instead provides its own rules dealing with appeals from the SCT: “The following Rules apply to appeals from the SCT to the Court of First Instance” (RDC r. 53.84). And so, whereas it was Part 44 of the RDC that set out, for example, the tests for granting permission to appeal and for allowing an appeal from the SCT under the Former Part 53, under the Current Part 53 these rules are provided by Part 53 itself.
7. The Claimant submits that Part 44 of the RDC nevertheless applies to appeals from the SCT, notwithstanding RDC rr. 53.7 and 53.84, albeit only insofar as Part 44 does not contradict the provisions of Part 53. He relies on RDC r. 44.1 for this proposition, which provides as follows:
The Rules in this Part [i.e. Part 44] apply to appeals to:
(1) the Court of Appeal; and
(2) the Court of First Instance.(emphasis added)
Appealsfromthe SCT are appeals to the CFI. The Claimant’s case is that, while Part 53 applies to appeals from the SCT pursuant to RDC r. 53.84, so too does Part 44 apply pursuant to RDC r. 44.1(2). As for the Claimant’s contention that Part 53 takes precedence over Part 44 of the RDC, with Part 44 applying only to the extent that it is not at odds with Part 53, this is premised on RDC r. 44.3 which provides that: “This Part [i.e. Part 44] is subject to any Rule, enactment or Practice Direction which sets out special provisions with regard to any particular category of appeal.” It is uncontroversial that the rules of the Current Part 53 relating to appeals from the SCT constitute special provisions for a particular category of appeal within the meaning of RDC r. 44.3.
8. One difficulty I have with this construction is that RDC r. 53.86, which appears under the heading ‘Appeals’ in Part 53, provides also that “This Part is subject to any Rule, enactment or Practice Direction which sets out special provisions with regard to any particular category of appeal.” On a plain reading of RDC r. 53.86, and transposing the logic of the Claimant’s construction of RDC r. 44.3, Part 53 would apply to appeals from the SCT to the extent that it does not contradict the “special provisions” of Part 44 governing appeals from tribunals to the CFI. And so there would be two regimes governing appeals from the SCT, with each applying to the extent it is not in conflict with the other, which is to say that the conflicting provisions of both would / would not apply in all cases, which would be an absurdity.
9. And if it is the case that a later rule of the RDC supersedes any earlier rule with which it is in conflict—and I do not say that that is the case—it would follow that the Current Part 53 supersedes inconsistent provisions in Part 44 of the RDC—with, amongst other things, RDC r. 53.86 superseding RDC r. 44.3 insofar as it applies to small claims—resulting, on the Claimant’s construction, in the new rules of the Current Part 53 governing appeals from the SCT only to the extent that they are not in conflict with the corresponding rules of Part 44. This would be to say that the new appeal regime of the Current Part 53 adds nothing to the old regime to the extent the two regimes’ rules are the same and is overridden to the extent their rules are different. This would also be an absurdity and would deprive RDC r. 53.84—“The following Rules apply to appeals from the SCT to the Court of First Instance”—of all its meaning.
10. In my judgment, the better construction of RDC r. 44.3 is as follows: except where a rule, enactment or practice direction dictates otherwise through setting out special rules for a particular category of appeal, Part 44 applies to appeals to the Court of Appeal and to the CFI. RDC r. 53.84 constitutes a rule of the type referred to in RDC r. 44.3 and provides that the rules which follow it—i.e. “special provisions”—apply to appeals from the SCT—a “particular category of appeal.” The consequence of RDC rr. 44.3 and 53.84, then, would be that Part 44 does not apply to appeals from the SCT, notwithstanding that they are appeals to the CFI which would otherwise have been governed by Part 44, and that instead that particular category of appeal is governed by the special provisions found in Part 53 of the RDC.
11. What, then, is the purpose of RDC r. 53.86? In my view, this rule operates in the same way as RDC r. 44.3. Pursuant to RDC r. 53.86, Part 53 applies to appeals from the SCT except where a rule, enactment or practice direction dictates otherwise through setting out special rules for a particular category of appeals from the SCT. According to this interpretation, while RDC r. 44.3 permits carve outs from the two categories of appeals to which Part 44 applies, appeals to the Court of Appeal and appeals to the CFI, RDC r. 53.86 permits carve outs from appeals from the SCT to the CFI particularly. So, for example, a rule, enactment or practice direction could provide that special provisions apply to, say, appeals from the SCT in employment or tenancy disputes, and the rules which ordinarily apply to appeals from the SCT in the Current Part 53 would thereby not be applicable to those cases.
12. In short, the rules of Part 44 of the RDC do not govern the Appeal.
The Same Judge Issue
13. As stated above, the Defendant’s application for permission to appeal was decided in the CFI by the judge who gave the Judgment in the SCT. The Claimant objects to this and it can be said from the outset that the RDC would not permit this circumstance for appeals governed by Part 44. RDC r. 44.15 provides that: “An application for permission to appeal referred to the appeal Court by the lower Court or made to the appeal Court in an appellant’s noticemay not be decided by the Judge against whose decision permission to appeal is sought.” (emphasis added) The same policy is reflected in the rule that a judge whose decision is appealed cannot sit on the appeal bench tasked with reviewing the decision (see: Article 29(2) of DIFC Law No. 10 of 2004, being the DIFC Court Law).
14. One important difference between the Former Part 53 and the Current Part 53 is that, except where permission to appeal is applied for at the hearing in which the challenged decision is made—a right not expressly provided for but nevertheless clearly implicit in RDC r. 53.92—under the new regime, a prospective appellant from the SCT may only apply for permission to appeal from the appeal court i.e., in the context of the SCT, the CFI. Previously, a prospective appellant was able to apply for permission first to the “lower Court” and, if unsuccessful, a second time to the “appeal Court” i.e. to the SCT first and the CFI second.
15. Where the CFI refuses permission to appeal, the prospective appellant can request the decision to be reconsidered at a hearing pursuant to RDC r. 53.98, but only on condition that the decision was made without a hearing. RDC r. 53.98 expressly provides that the reconsideration may be assigned to the same judge who dismissed the application on the papers. Otherwise, there is no further recourse available to a prospective appellant against a decision of the SCT. Nor, apparently, is there a procedure expressly available anymore for reopening decided applications for permission to appeal from the SCT where required in order to sidestep “real injustice.” Previously, an appellant could request this under RDC r. 44.154. Importantly, there is no rule in the Current Part 53 comparable to RDC r. 44.15 which expressly prohibits applications for permission to appeal referred to the CFI being decided by the judge against whose decision permission to appeal is sought.
16. The appearance of justice is very important: “it is not merely of some importance but is of fundamental importance that justice should not only be done but should manifestly and undoubtedly be seen to be done,” Lord Chief Justice Hewart famously stated inR v Sussex Justices, Ex parte McCarthy([1924] 1 KB 256, [1923] All ER 233). Is justice seen to be done if a prospective appellant’s shot at challenging a decision is determined by the very judge whose decision he would like another judge to review, in circumstances where further recourse might not be available? I do not think it is. While a judge can and frequently will change his or her view, the starting presumption must be that the judge’s view on the relevant issue(s) is already established and to that extent the judge will generally be less well placed than another judge to provide a re-view of the decision. Moreover, while a judge may be neutral as between the parties when making a decision, in the context of an appeal, it is his or her decision, not either of the parties’ cases, that is challenged and so, in my judgment, the judge is not in this situation a neutral third party strictly speaking. For these reasons, I do not think it would appear just if a judge was assigned to be the sole gatekeeper of a challenge to his or her own decision. While it is routine for judges in the CFI to decide applications for permission to appeal their own judgments—with the obvious advantage that such a judge is already familiar with the relevant issues—this occurs in a context where, if the judge decides to dismiss the application, the prospective appellant is guaranteed one further and different view on the application if he or she re-applies to the Court of Appeal. The integrity of a re-view process is undermined, in my opinion, if the view which underpins the judgment has the final say on whether it can be evaluated.
17. In the present case, the judge whose decision the Defendant wanted another judge to review, being the Judge, granted the Defendant permission to appeal. As such, the prejudice which the Defendant in theory faced by having its application decided by the same judge whose decision it wished to appeal did not in the end arise. Had the application been dismissed, the position would be very different. But in circumstances where permission to appeal was granted and, indeed, where the objection is made, not by an aggrieved prospective appellant, but by a respondent, in these circumstances, with respect, I think the objection is hollow.
18. In future, however, I think applications for permission to appeal SCT decisions should not be decided by the judge, this time sitting in the CFI, whose decision is challenged. Perhaps an exception can be made where the SCT judge will grant permission rather than refuse it.
The Appeal Test Issue
19. The Claimant submits that the Appeal was incapable of being allowed according to the test set out in RDC r. 44.118. Whereas the Defendant’s grounds of appeal “refer exclusively to findings of facts,” the Claimant submits, RDC r. 44.118 precludes the possibility that an appeal which it governs be successful on the basis that the appealed decision was wrong in relation to a question of fact:
The Court of First Instance will allow an appeal from a decision of a tribunal provided for in the Law, DIFC Law or Rules of Court where the decision was:
(1) wrong in relation to a question of law;
(2) unjust because of procedural unfairness or a miscarriage of justice; and/or
(3) wrong in relation to any other matter provided for in or under DIFC Law.
20. It follows from my finding that Part 44 of the RDC does not any longer apply to appeals from the SCT that RDC r. 44.118 does not apply also. There is, however, precedent more recent than the date on which the Current Part 53’s came into force for the Claimant’s proposition to the contrary and so the Appeal Test Issue must be addressed fully.
21. At [3] ofLouriz v Leticia [2021] CFI 084 (28 October 2021), an appeal from the SCT to the CFI, Lord Angus Glennie stated:
RDC r.44.118 applies to this appeal.The Court will allow the appeal only when the decision of the Small Claims Tribunal: is wrong in law; was arrived at unjustly because of some procedural or other unfairness; or is wrong in relation to other matters provided for in or under Dubai International Financial Centre law.There is no right of appeal against findings of fact made by the Small Claims Tribunal unless, of course, such findings derived from an error of law or some procedural unfairness.(emphases added)
22. With the greatest respect to the learned judge, I do not agree that RDC r. 44.118 applied inLouriz.The Court Order provides at [3] that: “Part 53 shall apply to any cases filed after 6 June 2021 or to cases where a defendant is yet to be served as of 6 June 2021.” The claim form inLourizwas filed on 1 August 2021 and the case therefore was governed by the Current Part 53. Lord Glennie appears to not have been taken to the relevant provisions of the Current Part 53 by the parties in the case, but it applied all the same. In my judgment,Lourizshould not be followed on the question of whether RDC r. 44.118 applies to appeals from the SCT.
23. RDC r. 44.118’s counterpart provision in the Current Part 53 is RDC r. 53.87 and provides as follows:
The Court will allow an appeal where the decision was:
(1) wrong;
(2) unjust because of a serious procedural or other irregularity in the proceedings; or
(3) wrong in relation to any other matter provided for or under any law.
As can be seen, under the Current Part 53 an appeal may be allowed where a decision of the SCT is wrong in fact.
24. The Claimant’s objection falls away.
The Skeleton Argument Issue
25. The Claimant submits that, in breach of RDC r. 44.29, the Defendant did not file a skeleton argument with its appellant’s notice. For the reasons explained above, RDC r. 44.29 of Part 44 of the RDC does not apply to appeals from the SCT.
The No Opportunity to Respond Issue
26. Permission to appeal the Judgment was given on 28 October 2021, which is to say one day after the Defendant’s appellant’s notice was filed. Needless to say, the Claimant had not responded to the Defendant’s application by that time. The Claimant says that a respondent is entitled to make written submissions in opposition to an application for permission to appeal within 21 days of service upon him of an appellant’s notice pursuant to RDC r. 44.14, which, as we have seen, does not apply to appeals from the SCT. And there is no comparable provision in the Current Part 53.
27. In any event, while it may be good practice for the Court to hear from both sides before granting or denying permission to appeal a decision, in my judgment whether permission is sought from the CFI or the Court of Appeal, RDC rr. 53.91 and 44.19 only require for the purposes of granting permission that, first, permission is sought from the Court by aprospective appellantand that, second,the Courtconsiders that the appeal would have a real prospect of success or that there is some other compelling reason why the appeal should be heard. A respondent’s contribution to the enquiry is not indispensable. As soon as the criteria of RDC rr. 53.91 or 44.19 are satisfied, permission to appeal may be given by the Court. And where a judge is sure that a proposed appeal has a real prospect of success or that there is some other compelling reason why the appeal should be heard, a prompt grant of permission to appeal will have the additional benefit of saving a respondent time and expense in opposing the application in vain. But while there is no rule which provides a respondent an opportunity to respond to an application for permission to appeal in the SCT, needless to say in appropriate cases—for e.g. where the call is closer—responses will be invited and/or considered.
The Extent of the Appeal Issue
28. At [5] and [6] of the Permission Order, the Judge stated:
5. The Appellant (the Defendant in the case) filed its appeal on the grounds that the Judge erred in finding that the Claimant’s salary was to be in the sum of AED 75,000 per month rather than AED 40,000, as argued by the Defendant.
6. In review of the Judgment and the documents recorded on the Court file, it appears that the Claimant may have a real prospect of success in an appeal against the Judgment, and I find this to be a compelling reason for the Appeal to be heard, and therefore the Appeal satisfies the requirements of RDC 53.91, and must be granted henceforth.
In granting the Defendant permission to appeal, therefore, the Judge only made reference to the Final Salary Issue. The Claimant queries whether the Judge’s permission was limited to that issue without extending to the Claimant’s other grounds of appeal.
29. InNS Investments Limited v Ajay Sethi [2021] CA 010 (18 November 2021), it was argued by the Respondent that, in granting permission to appeal, the judge below—who happens to be myself—focused exclusively on a certain point and said nothing about another and that the grant of permission to appeal should therefore be understood as limited to the first point. Addressing this proposition, the Court of Appeal stated:
We cannot accept this argument. While it is true that a judge may give limited permission to appeal, limiting the issues to be heard (see Rule 42.22), the limits of the permission in such a case should be set out on the face of the order granting permission… The order does not limit the grounds of appeal or the arguments which might be advanced in support of the appeal.
30. The position appears to be even clearer in the SCT. The Current Part 53 has no counterpart provision to RDC r. 44.22. In any event, the Permission Order does not on the face of the order or otherwise limit the grounds of appeal to the Final Salary Issue and so the Permission Order does not limit the Appeal to that issue.
The Substantive Issues
31. Along with the Final Salary Issue, there are three further substantive issues in the Appeal which require determination. These are follows:
i. First, whether the Judge was wrong in law in failing to consider that the Claimant was or could have been terminated for cause (the“Termination for Cause Issue”). The Defendant submits that the Judge ought to have concluded that the Claimant was not entitled to payment in lieu of notice in accordance with Article 63(3)(a) of DIFC Law No. 2 of 2019, being the DIFC Employment Law (the“Employment Law”).
ii. Second, whether the Judge erred in his finding that there was no evidence that the Claimant took vacation leave in 2020 and 2021, awarding him payment in lieu of vacation leave for this period (the“Vacation Leave Issue”). The Defendant submits that there is clear evidence that the Claimant used his vacation leave entitlement and so no payment ought to have been made.
iii. Third, whether the Judgment should be stayed (the“Stay Issue”). The Defendant submits that, if the Judgment is not stayed, it risks paying out sums which would be eclipsed by its much larger claim, the Defendant’s Claim, which it may never recover.
32. I will deal with the Final Salary Issue First.
The Final Salary Issue
33. By way of brief recap, on 29 September 2021, H.E. Justice Maha Al Mheiri ordered the Defendant’s counterclaim to be transferred to the CFI. One consequence of this was that the Claimant’s claim and the Defendant’s counterclaim were separated from each other in circumstances where there were issues common to both claims. While the Claimant had asked the SCT, in opposition to the Defendant’s application for the entire proceedings to be transferred to the CFI, to make the order the SCT subsequently made, it is now common ground between the parties that the Claimant’s Claim in the SCT and what became the Defendant’s Claim in the CFI should not have been divided.
34. The Claimant’s counsel has highlighted that, at the time the Defendant’s transfer application was made and heard, the Claimant was a litigant in person. He sought the expediency offered by the SCT, but the more esoteric considerations of issue estoppel and case progression—the dispute has at its centre a disputed allegation of dishonesty which made the case, the parties’ now agree, unsuitable for progression according to the simplified procedures of the SCT—were not in the Claimant’s contemplation. But the Transfer Order was made and it was not appealed by the Defendant, the Claimant’s counsel submits, and so the Court should dispose of the Appeal in the usual way based on the submissions made to and evidence put before the Judge before making the Judgment.
35. It is said by the Claimant that, by not appealing, the Defendant accepted the separation of the Claimant’s Claim and the Defendant’s Claim, one inevitable consequence of which would be issue estoppel arising in the CFI in respect of the Final Salary Issue in the event of that issue being raised in the CFI proceedings as cases in the CFI are slowed down by case management, disclosure, lengthy trials and so on making it a foregone conclusion that the Final Salary Issue would be decided by the judge hearing the Claimant’s Claim in the SCT, not the judge hearing the Defendant’s Claim in the CFI later on. But let it be recalled that the Defendant was also a litigant in person at the time the Transfer Order was made and until after the window for appealing that order had closed. Moreover, when making the Transfer Order, the learned judge stated at [33] of her reasons that she had “no doubt or question” that the Defendant “must be able to fully pursue its Counterclaim [i.e. the Defendant’s Claim].” The Defendant’s Claim already at that time included the Final Salary Issue. In my judgment, the Defendant can be excused if it understood from this statement that its own claim, i.e. the Defendant’s Claim, would not be prejudiced by the Transfer Order, whether by issue estoppel or otherwise.
36. More importantly, however, my hesitation in the Appeal is not premised on my disagreement with the Transfer Order as such. I do not propose that that decision is reopened. Instead, my concern stems from my conclusion that, as a consequence of the Claimant’s Claim and the Defendant’s Claim being separated and with the prospect of the Final Salary Issue in particular being finally decided in these proceedings, there is real possibility that injustice will be delivered to either the Claimant or the Defendant if the Appeal is approached as a straightforward review of the Judgment against the evidence before the Judge at the time he gave it and without regard for, firstly, the fact that the evidence was manifestly insufficient for properly deciding at least the Final Salary Issue and, secondly, the fact that the consequences will be felt not only in the Claimant’s Claim but also in the Defendant’s Claim which is still on foot and more suitable for disputed allegations of dishonesty to be determined in. This, in my judgment, would be like deciding the Appeal with blinkers on.
37. Suppose, for example, that it is decided in the Appeal that the preponderance of evidence before the SCT—however thin and untested—suggested that the Claimant had wrongfully increased or caused to be increased his monthly compensation from AED 40,000 to AED 75,000. The result of this finding would not only be the drastic reduction of the Claimant’s entitlement under his employment contract (the“Employment Contract”) in the Claimant’s Claim, but also his being estopped from revisiting the Final Salary Issue in the Defendant’s Claim in the CFI with the result, in turn, that the Defendant would almost certainly be successful in any application for summary judgment for repayment of 16 months’ worth of overpayment it alleges in the sum of AED 560,000. And the Defendant would no doubt take full advantage in its CFI claim of a finding, unappealable, that the Claimant had committed fraud against the Defendant, which naturally lends itself to the Defendant’s other dishonesty claims. Now suppose that the Claimant had not, in fact, committed any wrongdoing in relation to his salary and that the evidence of the Defendant to the contrary was incorrect or untruthful. Would it not be regretful that the former employee of a company had no opportunity to properly challenge and undermine the evidence collected and advanced against him by his former employer, including by means of cross-examination, in circumstances where an ex-employer will in many cases be able to counterfeit a preponderance of written and documentary evidence against an ex-employee with relative ease? Needless to say, I am not suggesting in any way in this hypothetical scenario that the Defendant has in fact acted fraudulently.
38. Suppose, instead, that it is found in the Appeal that the Defendant failed to establish that the Judge’s decision on the Final Salary Issue was wrong or unjust or it is found that the preponderance of evidence before the SCT suggested the Claimant’s final salary was AED 75,000 in any event. Would it not be regretful that the Defendant had no opportunity, before such a decision was made, to undermine the Claimant’s evidence or discredit him, in circumstances where documents which the Claimant when an executive officer of the Defendant could perhaps easily have executed himself or caused to be executed being the principal support to his case that the content of those documents truly reflected his final salary? Needless to say, I am not suggesting in any way in this alternative hypothetical scenario that the Claimant has in fact acted fraudulently either.
39. As noted above, the Claimant’s counsel has invited the Court to dispose of the Appeal in the usual way by reviewing the Judgment against the submissions made to and the evidence then before the SCT. With respect, I do not think that, as a matter of principle, this approach would result in the Appeal being disposed of in accordance with the Overriding Objective of the RDC, i.e. justly, to the greatest extent possible. I think it would have closer affinity to a high-stakes roll of the dice than a piece of a just resolution of a dispute. The question of whether the Claimant’s final salary wasin factAED 40,000 or instead AED 75,000 at the time of his termination and the question of whether the Judge was wrong to find, based on the submissions and the evidence before him, that it was the latter are two separate questions the answers of which I have no certainty would lead to the same conclusion.
40. The Defendant has proposed that the Final Salary Issue be determined in the Defendant’s Claim in the CFI. The Claimant has proposed this also in the alternative to its primary proposal. I think this is the best course, and so I set aside the Judgment insofar as it determined the Final Salary Issue. There can now be no issue estoppel arising in relation to the Final Salary Issue (see: [49] ofNS Investmentswhere the Court of Appeal stated “there can be no issues estoppel arising from the judgment below which has now been set aside”).
The Termination for Cause Issue
41. If the Claimant was terminated for causes then, pursuant to Article 63(3)(a) of the Employment Law, he will be unentitled to receive any payment in lieu of notice period. The Defendant contends that the Judge failed to assess or consider whether the employment was terminated for cause.
42. The Defendant had argued before the SCT, however, that the Claimant had resigned from his position with the Defendant (see: [28] of the Defendant’s submissions dated 14 October 2021, which were the Defendant’s final submissions to the SCT (the“Defendant’s Final Submissions”).
43. In an earlier document, the Defendant’s defence and counterclaim dated 11 August 2021 (the“Defence and Counterclaim”), conversely, the Defendant had indeed alleged at [2.8] that, on account of the Claimant “unlawfully [transferring] company funds… the Defendant was left with no other alternative but to terminate the Claimant’s contract with immediate effect on 12 April 2021.” At [2.27], the Defendant pleaded that “the Claimant’s Claim for ‘Notice Month Salary’ should be dismissed on the basis of Article 63(3)(a) of the DIFC Employment Law.”
44. To add to the confusion, the Court has been shown a letter dated 12 April 2021 from the Defendant, signed by its director and shareholder, to the Claimant in which it is stated:
Subject: Termination Letter
Dear Sajid,
On behalf of our company, considering the current financial situation. It is very sad to announce that you have been terminated from our company effective today 12thApril 2021. it was our pleasure to work with you
It is the Defendant’s case that the Claimant asked the Defendant’s director to sign this letter and that the latter did so without knowing the letter’s content.
45. Looking at the development of the Defendant’s case on the Termination for Cause Issue, the Defendant appears to have abandoned its claim that the Claimant was terminated for cause at least by the 14 October 2021 when it filed the Defendant’s Final Submissions in which, notwithstanding the termination for cause claim’s presence in the Defence and Counterclaim, the claim was absent entirely in those submissions. Indeed, it was replaced.
46. More recently, in the Appeal, the Defendant has said that the Termination for Cause Issue is before the CFI for determination (see: [9] of the Defendant’s submissions dated 19 May 2022). This appears to be incorrect, however, as the Claimant’s counsel has stated in an email sent to the Registry on 19 May 2022 also.
47. The Defendant’s position on the Termination for Cause Issues is confusing. This appeal is not an opportunity for the Defendant to have a second bite of the cherry. Had the Defendant not abandoned the Termination for Cause Issue, I likely would have been minded to decide it along with the Final Salary Issue in the CFI. But it was abandoned.
48. I decide the issue against the Defendant—which is consistent with the Defendant’s final position before the SCT in any event—with the single qualification that the Claimant’s entitlement must be calculated in accordance with the Claimant’s final salary as it is determined to be in the CFI proceedings.
The Vacation Leave Issue
49. The Claimant pleaded to the SCT that he had not taken any holiday in 2020 nor in 2021 until his termination. In total, the Claimant claimed payment in lieu of untaken holiday for a period of one year and four months which he calculated to be worth AED 100,000.
50. While in the Defence and Counterclaim the Defendant did not allege that the Claimant had utilised all of his annual leave in 2020—other arguments were advanced—in the Defendant’s Final Submissions—which it should be stated was the final submission of either of the parties before the hearing and before the Judgment was handed down six days later i.e. the Claimant did not respond to these submissions and arguably had no opportunity to—the Defendant described the Claimant’s claim as “a blatant lie” ([34]) and detailed three trips which it alleged the Claimant had taken to Pakistan and France in 2020 which together consumed 36 days of annual leave (in the Defendant’s Final Submission’s it was incorrectly stated that three trips consumed 50 days of annual leave). The Defendant submitted that “the Claimant is not entitled to receive any payment in lieu of annual leave not taken… We request that this head of claim be dismissed in its entirety and a negative inference be drawn against the Claimant as a result of his untruthfulness in present this claim to the SCT.” ([35])
51. The Judge found that “The Defendant failed to provide evidence of the Claimant’s leave applications during the period of 2020 and the 4 months of 2021” ([42] of the Judgment) and, though he had calculated that the Claimant was actually entitled to AED 115,338.17, awarded him AED 100,000 in accordance with his claim.
52. When applying for permission to appeal the Judgment, the Defendant against raised the Vacation Leave Issue. The Defendant stated that, at the hearing of the claim, the Defendant’s director had “mentioned that the Claimant was solely responsible for the management of the company. The fact that the Claimant failed to complete any leave applications for the leave he consumed during his employment, should be held against the Claimant and not the Defendant.” ([18]) The Defendant also highlighted that it had given the Claimant an opportunity to submit his passport for examination to the SCT, while the Claimant had not.
53. In its written submissions for the Appeal, the Defendant argued that:
50. That evidence demonstrates that the Claimant was out of the country, taking 36 days of leave in 2020, well beyond his contractual entitlement and eclipsing both his allowance for 2020 and the 8.32 days pro rata allowance for 2021.
51. Accordingly, the learned Judge should not have awarded 25 days’ payment in lieu of leave for 2020 and 8.32 days’ payment in lieu of leave for 2021 (see calculation at paragraph 4 of Judgment). This conclusion failed to take any account of the evidence and accordingly was procedurally unfair, wrong in law and unjust.
52. Rather, he should have awarded no days (in light of the excessive leave taken in 2020) or, at the most, 8.32 days’ leave for 2021…
54. In his written submissions for the Appeal, the Claimant responded to the Vacation Leave Issue thus:
63. Turning to the specific allegations made in this part of the Appeal grounds, the reference to the Claimant’s passport (entry and exit stamps) at paragraph 19 thereof is:
a. a factual allegation that cannot be repeated or reconsidered in the context of this appeal and;
b. in any event, entirely inadequate in terms of proving the unsustainable proposition that Claimant had taken annual leave at the time, because it was, in any event, part of the Claimant’s professional responsibilities to travel to different destinations in relation to the business activities of the Defendant.
In paragraph 19 of the Appeal Grounds, the Defendant makes the untenable assertion that the Claimant “…consumed at least 50 days of leave.”
65. The Claimant submits that it would be unlikely, if not impossible, that he could have consumed such a large number of annual leave days without the Defendant ever raising this as a contentious point during the Claimant’s employment.
66. As such, this part of the Appeal grounds must also be dismissed as legally (and even factually) baseless and unsustainable.
55. Two allegations have been made against the Claimant relevant to the Vacation Leave Issue to date, namely, first, that rather than taking no holiday in 2020, the Claimant in fact exceeded his entitlement and, second, that if there were no applications for leave pertaining to the Claimant for the relevant period, as the person responsible for the management of the Defendant during his employment, this is a factor against, not for, him. The Claimant’s answer to these allegations is, first, that it was part of the Claimant’s professional responsibilities to travel to different destinations in relation to the business activities of the Defendant and, second, that it would be unlikely that the Claimant could have consumed such a large number of annual leave days without the Defendant raising this during the Claimant’s employment.
56. With respect, rather than stating without explaining that the Claimant’s responsibilities required him to travel, it would have been better use of the Claimant’s submissions to rebut the allegation that he had consumed his annual leave during trips to Pakistan and France—were the trips to these two countries business trips?—particularly in circumstances where the Defendant has said that he was responsible for the Defendant’s lack of records of his annual leave and where the Claimant himself has pleaded that he “was managing all the business activities for the Head-office and all other branches.” ([4] of the Claimant’s Reply to the Defendant’s Response dated 9 August 2021)
57. If the Claimant had not travelled to Pakistan and France in 2020, he would have said so. If he did but they were business trips, the Court would have been informed. I find that, on the balance of probabilities, the Claimant has consumed his holiday entitlement for the year 2020. And if he did not, he is responsible for this finding, having effectively pleaded ignorance rather than support his bare denial with evidence or submissions of substance.
58. It has not been specifically alleged that the Claimant took leave during 2021, however. I see no reason, therefore, to conclude that the Claimant used his leave entitlement or any part of it that year. The Judge calculated the Claimant’s annual leave entitlement for 2021 as being AED 28,799.92. This was based on the Judge’s finding that the Claimant’s final salary was AED 75,000 per month. The Claimant shall be awarded payment in lieu of untaken annual leave for 2021, but the figure is to be calculated according to the Claimant’s final salary when that is determined.
The Stay Issue
59. Clause 17.3 of the Employment Contract provides as follows:
On termination of your employment, you must immediately repay all outstanding debts, loans or monies due to the Company or any Group Company. The Company is hereby authorised to deduct from any remuneration or other amounts owed to you, a sum in repayment of all or any part of any such debts, loans or monies.
The Claimant, therefore, agreed that any amounts of money that he owed to the Defendant would be deducted from any amounts of money that the Defendant owed to him. The Claimant’s indebtedness to the Defendant, if he is indebted, is still in the process of being determined, in the Defendant’s Claim in the CFI. In such circumstances, I think it is right that the Judgment be stayed until the Defendant’s Claim has been determined.
Conclusion
60. For the foregoing reasons, I make the following orders:
i. The Appeal is allowed.
ii. Paragraph 1 of the Judgment is varied to provide that the Defendant shall pay the Claimant the sum of AED 295,480.95, comprising:
a. AED 15,780.82 in respect of unpaid salary;
b. AED 44,186.28 in respect of end of service gratuity;
c. AED 120,000 payment in lieu of notice period;
d. AED 15,360 payment in lieu of annual leave; and
e. AED 54,000 payment in lieu of air tickets.
iii. Paragraphs 1 (as varied) and 2 of the Judgment are stayed pending final determination of the CFI Proceedings, with liberty afforded to either party to apply.
iv. Liberty is afforded to the Claimant to apply to the SCT, in the event that the Final Salary Issue (as defined in the Reasons) is finally determined in his favour in the CFI Proceedings, for a summary determination that the following amounts are additionally payable to him:
a. AED 13,808.18 in respect of unpaid salary;
b. AED 59,278.72 in respect of end of service gratuity;
c. AED 105,000 payment in lieu of notice period; and
d. AED 13,439.93 payment in lieu of annual leave.
61. The parties are invited to check the calculations.