Dubai court orders woman to pay Dh100,000 over car sale

Dubai: A Dubai court has ordered a woman to pay Dh100,000 to a man after she failed to hand over the proceeds from the sale of his four-wheel vehicle, despite agreeing to transfer the money immediately after ownership changed hands.

The Dubai Court of First Instance ordered her to pay Dh95,000 in outstanding sale proceeds, Dh5,000 in compensation, and 5 per cent annual interest from the date the claim was filed until full payment. She was also ordered to cover court fees and costs.

Under an agreement between the two, the woman was required to sell the vehicle through an auction, collect the Dh95,000 purchase price and transfer the money to the owner once the sale was completed.

The claimant said he had delivered the vehicle and completed the ownership transfer but received none of the proceeds despite repeated demands for payment.

A court appointed expert examined the agreement and found that the woman had breached her contractual obligation by failing to pay the sale proceeds. There was no evidence that she had repaid any part of the amount.

The expert also highlighted conflicting explanations for the delay. During the proceedings, the woman blamed issues identified with the vehicle after the sale, which she said had prevented her from collecting the full purchase price.

However, an email she sent to the claimant attributed the delay to a restriction on her bank account that allegedly prevented her from making transactions.

The expert found that she had provided no documentary evidence to support either explanation and that there was no evidence the delay was caused by the claimant.

Both parties were given an opportunity to comment on the preliminary report. The claimant accepted its findings, while the woman submitted no objections within the prescribed period.

The claimant told the court that he had repeatedly tried to resolve the dispute amicably and had issued a formal legal notice demanding payment. He said the prolonged delay had deprived him of the use of his money and caused him distress.

He filed a lawsuit seeking Dh105,000, along with 5 per cent annual interest, court fees and legal expenses.

In its judgment, the court said contracts must be performed in good faith and in accordance with their terms, citing Articles 243 and 246 of the UAE Civil Transactions Law.

It also referred to Article 338, which addresses the fulfilment of obligations and remedies available when a debtor fails to comply, and Article 282, which establishes the duty to compensate for harm caused to another person.

The court noted that contractual obligations extend beyond the agreement’s wording to include requirements arising from the law, custom, the nature of the transaction and good faith.

After reviewing the expert report, the court accepted its findings and ruled that the woman had failed to fulfil her obligation to transfer the Dh95,000 sale proceeds after ownership was transferred to the buyer.

The court awarded an additional Dh5,000 in compensation, finding that the delay had deprived the claimant of the benefit of his money and caused non-financial harm, including distress and psychological suffering.

It also considered that the claimant had attempted to settle the matter amicably, given the woman additional time to pay and ultimately resorted to legal action to recover his money.

The court set compensation at Dh5,000, bringing the total award to Dh100,000.

The court ordered interest at 5 per cent per annum from the date the claim 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 ordered to pay court fees and costs under Article 133 of the Civil Procedure Law.

The final ruling requires her to pay Dh95,000 in outstanding sale proceeds, Dh5,000 in compensation, applicable interest and court costs.