Paid your debt but the case is still open? Here’s what you need to know

Dubai: Imagine paying off a rental dispute in full, only to find out over a year later that the case is still open and affecting your life. That is exactly what happened to a UAE resident who recently discovered an unresolved case in his name while trying to register a newly purchased car.

Despite having bank statements and WhatsApp messages confirming the payment, the case had not been formally closed, and the unresolved status may now be causing legal and financial complications.

The reader query:

A UAE resident recently attempted to register their new vehicle but was told there was a legal case or warrant registered under their name. Upon further inquiry, they discovered it was related to a rental dispute which they had fully settled back in March 2023.

The individual confirmed that they possess both bank statements and WhatsApp messages from the landlord confirming receipt of payment. However, they never received an official receipt despite multiple follow-ups.

“I’ve been dealing with them for over 10 years and have made previous payments to the same account without any issue, so I have no doubt the funds went to the correct party,” the resident stated.

The case still appears active in the system, and the resident is now worried that interest or penalties may have accumulated. “Given that I fulfilled my payment obligations in good faith, I believe I should not be held responsible for any delays or failures in lifting the case by the other party.”

What happens if a debt is paid, but the case isn’t closed?

Dr Hassan Elhais, legal consultant at Awatif Shoqi Advocates & Legal Consultancy, explained to Gulf News that the consequences depend on whether the payment was made while the case was still ongoing or after a court judgment had already been issued.

If payment was made while the case is still ongoing:
“If the debt was settled while the case is ongoing, then the debtor may submit the transfer proof to the court or to the expert – if there was one appointed in the case,” Elhais said.

“Accordingly, based on the transfer proof, and if such transfer is regarding the outstanding liability and fully clears such liability, then the court shall issue a judgment establishing that the liability is settled; however, the court could ask the respondent to bear the payment of court fees and expert fees as per the UAE Civil Procedures Law.”

If payment was made after a court judgment:
“Now, if the debt was settled after the judgment was issued, then the debtor may submit such transfer proof to the execution file and request to cancel all the execution procedures and close the execution file permanently as a result of full and final payment of all the outstanding amounts in the execution file,” he said.

“The execution judge may refer the matter to the accounting department to review if there is any outstanding amount, and in case there is no outstanding amount, then the execution case shall be closed based on that.”

Can interest or penalties still be charged?

“Legal interest is awarded by the court and is calculated based on what is provided for in a court judgment. This calculation could be from the date of judgment until the date of final payment. Therefore, the debtor would still be responsible for payment of legal interest until the date of final payment in addition to the debt,” Elhais said.

However, if the debt has already been paid, the debtor can submit the payment proof to the execution court. The court may then calculate any remaining legal interest before the case is formally closed.

Are WhatsApp messages and bank transfers enough to prove payment?

According to Elhais, “In case the debt has been repaid outside the court, then the debtor will need to use all means of evidence before the court to prove that the debt has already been repaid. These proofs could include electronic evidence such as WhatsApp messages or email messages, bank statements, acknowledgements, or receipts.”

He added that trial courts have the discretion to examine, review, and decide on the genuineness, validity, and admissibility of such evidence.

What should you do if a case remains open after payment?

Elhais advises that if the case is ongoing, the individual should attend the hearing and submit a defence memorandum along with all proof of payment.

“If an appeal is allowed, then they may submit their evidence before the appeal court so that the appeal court can examine the documents and deliver a decision after investigating the facts of the matter.”

If a court judgment was already issued and payment was made as per that judgment, proof of payment should be submitted to the execution court, which can then review and decide whether to close the case.

Will you still have to pay legal fees or interest to close the case?

Elhais noted that in this scenario, the court judgment includes interest or legal fees, these will be added to the total amount owed. Once all amounts (including interest and fees) are paid, and there’s no balance left, the execution case can be formally closed.

“Accordingly, all these amounts shall be added to the outstanding amount in the execution file. Once such amounts are paid and when there is no outstanding in the execution file, then the party against whom the execution case has been filed may request the execution case to be closed,” he said.