Claim No. CFI 002/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
PARKING DISTRICT SOLUTIONS LLC
Claimant
and
(1) THE RITZ CARLTON HOTEL COMPANY LIMITED
(2) HOSPITALITY MANAGEMENT LTD
Defendants
JUDGMENT OF JUSTICE SIR JEREMY COOKE
| Hearing : | 30 January 2023 |
|---|---|
| Counsel : | Mr. P.V. Sheheen instructed by Bestwins Law Corporation for Legal Consultancy for the Claimant Mr. Ashraf El Motei instructed by Abu Baker Salem Advocates & Legal Consultants for the Second Defendant |
| Judgment : | 30 January 2023 |
UPON the Claimant filing the Part 7 Claim Form on 12 January 2022 (the “Claim”)
AND UPON the Second Defendant’s Defence dated 12 April 2022 (the “Defence”)
AND UPON the Claimant’s Reply to the Defence dated 9 May 2022
AND UPON reviewing the Case file
AND UPON hearing counsel for the Claimant and Counsel for the Second Defendant at the Trial listed before me on 30 January 2023
IT IS HEREBY ORDERED THAT:
1. The Claimant’s Claim is dismissed.
2. The Claimant shall pay 90% of the Second Defendant’s costs of the action to be assessed by the Registrar if not agreed.
Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 31 January 2023
At: 2pm
SCHEDULE OF REASONS
1. The Claimant seeks payment of 4 invoices dated 29 February 2020 and 31 March 2020 in respect of Parking Valet services rendered to the Ritz Carlton Hotel in February and March 2020 in the total amount of AED 154,850. It also claims compensation for termination of a Services Agreement dated 1 April 2020.
2. It is said that the two defendants are jointly and severally liable for this amount, the First Defendant being the Managers of the Ritz Carlton Hotel in the DIFC (the Marriott brand) and the Second Defendant being the Owners. The First Defendant, for reasons unknown, did not participate in the action at all but the Second Defendant submitted a defence and argued its case.
3. Each of the Claimant and the Second Defendant adduced evidence from a witness but, in reality, nothing that they said in their witness statements or in cross examination added anything to the documentary record on which the dispute turns.
4. On 15 January 2019, a company called Zone Parking Solutions LLC (“ZPS”) entered into a Valet Parking and Self-Parking Services Agreement with “The Ritz-Carlton Hotel Company Limited as Hotel Operator” (the “15 January 2019 Agreement”), which was defined in that agreement as “the Operator” for a company named “National Corporation for Tourism & Hotels” which then owned the hotel. That contract, which was governed by DIFC law, expired on 14 January 2020 and contained within it a prohibition on assignment in clause 11. This provided as follows:
“Contractor shall not assign this Agreement or any part hereof without the prior written consent of Operator. Operator may assign this Agreement without the prior written consent of Contractor to the owner of the Hotel, a purchaser of the Hotel, a subsequent operator of the Hotel or a lender or mortgagee of the Hotel.”
5. The evidence did not reveal when the Second Defendant became the owner of the Hotel nor whether the 15 January 2019 Agreement was ever assigned to it. However, on 16 January 2020, after its expiry, ZPS entered into a document which was headed “Novation Agreement” with the Claimant which is said to be an associated company of ZPS. As between ZPS and the Claimant, the former transferred all its rights obligations and liabilities under a series of contracts to the Claimant with effect from 1 February 2020 onwards, including, it would appear, the 15 January 2019 Agreement. The governing law of the document was that of the Emirate of Dubai and the federal laws of the UAE. Neither the First nor the Second Defendant were party to this document.
6. As a matter of law (and trite law at that) that assignment could not be effective to transfer rights under the 15 January 2019 Agreement, which was governed by the law of the DIFC, as against either of the two Defendants nor bind them in any way without the prior written consent of the First Defendant as manager and agent for the Second Defendant. It could not, afortiori,be effective as a novation without a tripartite agreement to which the First Defendant was party as agent for the Second Defendant either.
7. On 1 March 2020, ZPS sent a letter, addressed to “the Ritz-Carlton Dubai International Financial Centre” at its address in Gate Village, DIFC, which would have been received by the First Defendant as managers of the Hotel. This included the following wording:
“I am writing you in relation to our agreement for the provision of A valet Parking Management Agreement services at The Ritz-Carlton Dubai International Financial Centre.
In an effort to improve efficiency and enhance our customer service, we have decided to create specialised divisions for certain services. We believe that this consolidation of business areas will allow us to allocate the appropriate teams, resources and expertise to the respective service. Accordingly, moving forward, all of our valet services will be handled by Parking District Solutions LLC, a company affiliated with Capstone Parking Solutions.”
8. Contrary to the submissions made by the Claimant, this was not a notice of an assignment of the 15 January 2019 Agreement, amounting only to a notification that the services to be performed by ZPS would in fact be carried out by the Claimant as its affiliated company. By this date, that Agreement had expired, since clause 5a provided expressly for a term ending on 14 January 2020 with a provision that the parties could thereafter renew the term of the Agreement “upon mutual written agreement”. Whether or not the parties were continuing to operate on the basis of the 15 January 2019 Agreement in February/March 2020, as the Claimant alleged, there had been no written agreement between ZPS and either defendant for its continuance and no notice of any assignment of contractual rights to the Claimant, which in any event, as a putative assignment by ZPS, was prohibited by clause 11 without the prior written consent of the First Defendant.
9. On 1 April 2020, the Claimant entered into a Services Agreement (“the Services Agreement”) with “The Ritz Carlton Hotel Company Limited (“Manager”) as manager for Hospitality Management Ltd (“Owner”). The recitals to the Services Agreement referred to the express authority given by the Owner (the Second Defendant) to the Manager (the First Defendant) to enter into the Agreement, pursuant to the Hotel management agreement between them, “subject to the approval rights, if any, of the Second Defendant”. A copy of that Management Agreement was not produced by the Second Defendant, which was not ordered by the Court to do so and it is to be assumed that there was such authority in the First Defendant, so that the Second Defendant was bound by the First Defendant’s execution of the Services Agreement. The Services Agreement, which was governed by DIFC law provided for a term of 12 months commencing on 1 April 2020 and ending on 31 March 2021 with a provision that the parties might thereafter renew the term of the Agreement upon mutual written agreement.
10. There was, in the Services Agreement, not only a similar provision against assignment by the Claimant, as “Contractor”, without the written consent of the First Defendant but, at clause 3b, an express provision stating that:“Manager may terminate this Agreement at any time during the term hereof upon 30 days’ prior written notice without cause, without any termination fee or any other cost, charge or expense of any kind or nature.”
11. It is apparent from this recitation of the documentary record that there was a gap between the expiry of the 15 January 2019 Agreement and the effective date of the Services Agreement, which included the periods of February and March 2020.
12. During that period, there is no doubt that valet parking services were rendered but there is no clarity as to the entity which rendered those services. As the Second Defendants point out, the timesheets recording the services were ZPS timesheets and that a number of the staff providing services prior to April 2020 were under the sponsorship of ZPS. Absent any contract between the Claimant and the First or Second Defendants which covered that period of time, or a valid assignment of contractual rights from ZPS in respect of that period, there can be no valid claim by the Claimant in respect of services during that period. Arguments were raised in submission about verbal agreements and estoppel and the benefit obtained by the Hotel from the services rendered but there is no evidence relating to any oral agreement or estoppel of any kind. On the face of it, although invoices were rendered by the Claimant, it is not possible for this Court to say that it, rather than ZPS, is entitled to payment on a quantum meruit/restitutionary basis.
13. It was argued that there was an admission of liability by the First Defendant in an email of 24 January 2021 when being pressed for payment of sums due under the Services Agreement as well as the invoices for February/March 2020. In that email, the following wording appeared:“We sorry for the delay. Our payments were processed and we will notify once they become ready.”In my judgement that is not an unequivocal admission that all the sums claimed were due and although the Particulars of Claim dated 15 March 2022, initially claimed sums due under the Services Agreement, as well as those allegedly due under the February/March 2020 invoices, the sums due under the Services Agreement were paid with contractual interest due thereon, on 9/11 May 2022.
14. In these circumstances the claim relating to the invoices for February/March 2020 must fail.
15. The Claimant also claims compensation for termination of the Services Agreement. On 1 October 2020, the First Defendant gave 30 days’ notice to the Claimant of such termination. Whilst it was argued by the Claimant that the effect of clause 3c of the Services Agreement meant that the Claimant was entitled to compensation for such termination, this is an impossible construction of that subclause. Clause 3b expressly provided that the First Defendant could terminate the Services Agreement“at any time”during its term,“without cause and without any termination fee or any other cost charge or expense of any kind or nature”.Clause 3c only provided for what was to occur in the event of a breach of a provision of the contract by one party or the other and provided for a right to terminate if a breach remained uncured after a ten-day notice. It provided that this right of termination was“in addition to whatever rights the non-defaulting party may have hearing, at law or in equity”.This has no application whatsoever to a termination under clause 3b which rules out any claim for compensation based upon termination in accordance with its terms.
16. An unquantified claim for loss of reputation or for other losses of any kind as a result of termination must therefore fail.
17. In the circumstances, the claim made by the Claimant against the Second Defendants cannot succeed, nor can it succeed against the First Defendant which has not appeared before this Court.
18. It is however plain that payment of sums due under the Services Agreement was only made following the institution of these proceedings by the Claimant. The vast majority of costs have however been incurred in relation to the dispute over the February/March 2020 invoices and the claim for compensation on termination of the Services Agreement.
19. In these circumstances, costs must follow the event and the Claimant must pay 90% of the Second Defendant’s costs.