The Unfinished Villa: A Dispute Over Design Fees and Project Delays

A property owner's dream of constructing a private two-story villa turned into a protracted legal battle when a dispute over design fees and project delays erupted between him and the engineering consultancy he hired. The case, which unfolded in the Al Ain Court of First Instance, highlights the critical importance of clear contractual terms and the pivotal role of expert testimony in resolving complex construction-related conflicts.

📋 Case Background: A Project Derailed

The conflict began when an engineering consultancy filed a lawsuit against a property owner, seeking payment of AED 40,000. The firm claimed this amount was due for their services in preparing the complete engineering and architectural plans for the client’s proposed villa. They asserted that this fee represented 2% of the total project value and that the owner had unjustly refused to settle the invoice. In addition to the principal amount, the consultancy demanded a steep 12% annual interest from the date the lawsuit was filed until full payment.

In response, the property owner launched a vigorous defense and filed a substantial counterclaim for AED 200,000. He painted a picture of significant professional negligence, arguing that the consultancy's severe delays, which he claimed extended over two years, had completely derailed his construction project. The owner contended that these delays caused him considerable material and moral damages, including the inability to secure timely financing and proceed with construction. He sought compensation for the financial losses and the distress caused by the stalled project.

🔍 The Court's Investigation and the Expert's Findings

Faced with conflicting technical claims, the court took a crucial step by appointing an independent engineering expert from the Judicial Department. The expert was tasked with a clear mandate: to review all documents, assess the work performed by the consultancy, determine the value of that work, identify any breaches of agreement by either party, and calculate the resulting damages.

After a thorough investigation, the appointed expert submitted a detailed report that became the cornerstone of the court's final judgment. The key findings were:

• No Formal Contract: The expert found that no formal, written agreement existed between the parties. The engagement was based on a work assignment issued by the owner to the consultancy.

• Partial Performance: The consultancy had successfully completed approximately 70% of the required design work. This included preparing and securing municipal approvals for the initial two phases of the project: the architectural and structural plans.

• Incomplete Work: The third and final phase, which involved preparing documents for contractor tenders and securing approvals from the financing bank, was never completed.

• Fair Value of Services: Based on the work accomplished, the expert concluded that the fair and deserved compensation for the consultancy was AED 28,000, not the AED 40,000 they had originally claimed.

⚖️ Legal Analysis and Court's Deliberation

The property owner strongly objected to the expert's report, arguing that the expert had not considered the financing bank's documentation and had overlooked the consultancy's failure to facilitate a proper tender process. He requested that the case be returned to the expert for further examination.

However, the court, exercising its discretionary power to evaluate evidence, found the expert’s report to be comprehensive, logical, and well-reasoned. It determined that the report provided a sufficient and convincing basis to adjudicate the dispute. The court cited established legal precedent that an expert is not obligated to perform their duties in a specific manner, so long as they fulfill the core mandate of their appointment, which the court found had been done.

Addressing the owner's counterclaim, the court delved into the reasons for the project's failure. The expert's report revealed a critical fact: the project had stalled because the price quotes received from construction companies during the tender process were significantly higher than the loan amount the owner had secured from his bank. The expert noted that the owner’s rejection of the project at that stage was “not in its proper place,” implying the issue was financial feasibility rather than a fault in the design. The court concluded that the consultancy was not responsible for the owner's inability to finance the construction at the proposed cost. Therefore, the owner's claim for damages due to project delay was deemed baseless.

⚡ The Final Verdict

Based on its thorough review of the evidence and its acceptance of the expert's findings, the court issued a two-part judgment:

In the Original Lawsuit:

The court ordered the property owner to pay the engineering consultancy the principal sum of AED 28,000, as determined by the expert. It also awarded legal interest, but at a reduced rate of 4% per annum from the date of the judicial claim until full settlement, reflecting the court's assessment of the economic conditions. The court rejected the request for immediate execution of the judgment and ruled that the legal costs for this part of the case should be shared equally between both parties.

In the Counterclaim:

The court completely dismissed the property owner's counterclaim for AED 200,000 in damages. It found no evidence to support the allegation that the consultancy was at fault for the project's failure. The owner, as the losing party in the counterclaim, was ordered to bear all associated legal costs.