A Dubai court has ordered a woman to pay Dh100,000 to a man after she failed to transfer the proceeds from the sale of his four-wheel vehicle, despite agreeing to hand over the money once ownership was transferred to the buyer.
The Dubai Court of First Instance directed the woman to pay Dh95,000 in outstanding sale proceeds, Dh5,000 in compensation and annual interest of 5 per cent from the date the lawsuit was filed until full payment. She was also ordered to bear court fees and costs.
Under an agreement between the parties, the woman was required to sell the vehicle through an auction, collect the Dh95,000 purchase price and transfer the amount to its owner immediately after completing the sale.
The claimant said he had handed over the vehicle and completed the ownership transfer but received none of the sale proceeds, despite making repeated requests for payment.
Conflicting Explanations
A court-appointed expert examined the agreement and concluded that the woman had breached her contractual obligation by failing to transfer the sale proceeds. The report found no evidence that she had repaid any part of the outstanding amount.
The expert also identified conflicting explanations given by the woman for the delay. During the proceedings, she attributed the problem to issues discovered with the vehicle after the sale, which she claimed had prevented her from collecting the full purchase price.
However, in an email sent to the claimant, she had cited restrictions on her bank account as the reason she could not complete the transfer.
The expert found that neither explanation was supported by documentary evidence. The report also found no indication that the delay had been caused by the claimant.
Both parties were given an opportunity to respond to the preliminary report. While the claimant accepted its findings, the woman did not submit any objections within the prescribed period.
The claimant told the court that he had repeatedly attempted to resolve the dispute amicably and had eventually issued a formal legal notice demanding payment. He argued that the prolonged delay had deprived him of the use of his money and caused him distress.
He subsequently filed a lawsuit seeking Dh105,000, together with annual interest of 5 per cent, court fees and legal expenses.
Court Upholds Contractual Obligations
In its judgment, the court emphasised that contractual obligations must be performed in good faith and in accordance with the agreed terms, referring to Articles 243 and 246 of the UAE Civil Transactions Law.
It also considered Article 338, which deals with the fulfilment of obligations and the consequences of non-performance, and Article 282, which establishes the principle that anyone who causes harm to another must compensate for it.
The court noted that contractual commitments are not limited to the express wording of an agreement but also extend to obligations arising from the law, custom, the nature of the transaction and the requirements of good faith.
After examining the expert report and other evidence, the court accepted the findings that the woman had failed to fulfil her obligation to transfer the Dh95,000 sale proceeds after ownership of the vehicle was transferred to the buyer.
Dh5,000 in Compensation
The court awarded the claimant an additional Dh5,000 in compensation, finding that the delay had deprived him of the benefit of his money and caused non-financial harm, including distress and psychological suffering.
It also took into account his attempts to settle the dispute amicably, the additional time he had allowed the woman to make the payment and the need to initiate legal proceedings to recover the outstanding amount.
The court assessed the compensation at Dh5,000, bringing the total principal award to Dh100,000.
Interest and Court Costs
The court further ordered interest at 5 per cent per annum from the date the lawsuit was filed until full payment, relying on a 2021 resolution of the General Assembly of the Dubai Court of Cassation concerning interest on ascertainable debts.
The woman was also directed to pay court fees and costs in accordance with Article 133 of the Civil Procedure Law.
The final judgment requires her to pay Dh95,000 in outstanding sale proceeds, Dh5,000 in compensation, applicable interest and court costs.
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