Session Date: 66 June 2009

Appeal by Cassation No. 66 of 2009 – civil appeal by cassation

(1-3) Sale “renouncing a sale” – judgment “its reasons: defects in argumentation: what is not so considered” – contract “pillars of contract: consensus” “Effects of contract: as regards the contract parties” “sale contract” – court of first instance “its powers regarding the ascertainment of the intention of the parties”.

(1) The contract is the law of the parties – its effect – that neither party may unilaterally renounce, amend or exonerate from liability except as allowed by the contract or mandated by the law.

(2) Court of first instance – has full power to ascertain the intention of the parties out of the circumstances and facts of the claim – its conditions – that its judgment shall be based on reasonable grounds.

(3) The contract the subject-matter of the dispute involved agreement that the seller may renounce the sale against compensation to the purchaser for nonperformance – that the judgment appealed by cassation found in favour of the right of the Appellant, i.e. the purchaser, to compensation and a refund of the price and cheques received by the Respondent, i.e. the seller, according to the provisions of the said contract – the contention against the judgment that it deviated from the evidence of the papers and breached the right of defence – baseless.

(4) Appeal by cassation “reasons for appeal by cassation: the irrelevant reason”.

That the judgment appealed by cassation found that the seller is entitled to renounce the sale under the terms of the contract and the agreement of the parties, and its judgment for the compensation of the Appellant under a penalty provision in the contract – contention against the judgment that it involved deficiency in examining the defence by the Appellant on the artificiality of the sale contract concluded by the First Respondent and another purchaser – irrelevant.

1- It is established jurisprudence of this Court that the contract is the law of the parties. It is the governing law for such parties, i.e. a law peculiar to them although based on an agreement among them. Nether of them may unilaterally renounce, amend or exonerate from liability except as allowed by the contract or mandated by the law.

2- It is established jurisprudence of this Court that the court of first instance may ascertain the intention of the parties out of the circumstances and facts of the claim. Such is part of its substantive jurisdiction so long as it is based on reasonable grounds.

3- The judgment appealed against by cassation has found in favour of the right of the Appellant to compensation, on the basis of the provisions of Article 7 of the sale contract dated 8.3.2004, which included an agreement between the parties on the right of the First Respondent to renounce the sale against commitment to pay in compensation five million Qatari Riyals and the refund of any amounts received from the Appellant as price of the property. This means that the seller, under the said Article 7 of the contract, has been authorized to renounce upon payment of compensation to the purchaser, and commitment to refund any amounts received from the purchaser. The aforesaid is considered as penalty for nonperformance. The judgment appealed against by cassation was committed to the said jurisprudence, ordered the payment of compensation to the Appellant and the refunding of amounts received as contract price as well as received cheques. As such, the judgment appealed by cassation has been in accord with proper law, and any contention based on this reason becomes baseless.

4- The judgment appealed by cassation found in favour of the seller’s right to renounce the implementation of the sale contract dated 8.3.2004, as provided under Article 7 of such contract, and in application of such agreement. It also ruled compensation for the Appellant in application of the penalty under the said contract. Accordingly, the contention by the Appellant against the judgment appealed by cassation that the latter was deficient in its examination of his defence on the artificiality of a sale contract concluded by the First Respondent and another purchaser is, regardless of any opinion thereon, irrelevant.

The Court
 

Having reviewed the documents, and having heard the report read out by the Judge-Rapporteur, and heard the submissions, and after the deliberations;

Whereas the appeal by cassation has satisfied its formalities;

The facts, as revealed in the judgment appealed by cassation and other documents, may be summed up as follows. The Appellant by cassation brought a claim No. 436/2007 – civil – applying according to his final applications in the claim for a judgment declaring the validity and effectiveness of the sale contract dated 8.3.2004, concluded between him and the First Respondent, the nullification of the registered sale contract concluded between the First and Second Respondents due to its artificiality, restitution of the situation to the status quo ante, ordering the payment by the First Respondent of five million Riyals in compensation for loss of imminent profit and losses resulting from delay in the execution by the First Respondent of his obligations, and the refunding to the Appellant by cassation of cheques received. In precaution, he also applied for an order against the First Respondent to refund the price and pay the amount of five million Riyals in addition to the payment of thirsty five million Riyals for lost profits and incurred losses. He states that he sold to the First Respondent, by virtue of a sale contract dated 8.3.2004, the property No. ……, located in ……, Doha, and detailed in the statement, for the price of 5,600,000 Riyals of which he paid 70,000 Riyals upon signature of the contract. They agreed on paying the balance to the First Respondent in monthly instalments for which the Appellant issued 123 cheques drawn on ….. Bank. The Appellant continued to pay the instalments. He further offered the payment of the balance to the First Respondent prematurely, but the latter did not register the property for the Appellant, nor did he respond favourably to his aforesaid offer to pay the balance, which the Appellant had to deposit with the court. The seller further artificially sold the property to the Second Respondent, who got his contract registered. The Appellant therefore brought his claim. The court ordered the First Respondent to pay as compensation to the Appellant the amount of eight million Riyals, refund the price and cheques he received under the contract dated 8.3.2004, and rejected the remaining applications. The Appellant lodged against the said judgment an appeal No. 843/2008, while the Respondent lodged against the same judgment an appeal No. 890/2008. The court combined the two appeals and decided, on 25.3.2009, to amend the appealed judgment so as to reduce the compensation amount to five million Riyals and otherwise confirm the said judgment. The Appellant by cassation lodged an appeal by cassation against the said judgment, which was presented before this Court, at the deliberations chamber, and a session was fixed for its consideration.

In his second reason the Appellant by cassation contends against the judgment that it deviated from documentary evidence and breached the right of defence. He stated that the seller has invoked his right under Article 7 of the sale contract dated 8.3.2004 concerning renunciation of the sale after registering the second sale contract without notifying the Appellant by cassation of his intention so to invoke, which renders the judgment defective and worthy of appeal by cassation.

This contention is inappropriate. It is established jurisprudence of this Court that the contract is the law of the parties. It is considered as the law governing such parties, which peculiar to them regardless of being originating in their contract. Neither party may therefore unilaterally revoke, amend or renounce except within the limits allowed by their agreement or mandated by the law. The court of first instance has the power to ascertain the intention of the parties out of the circumstances and facts of the claim. This falls within its substantive jurisdiction so long as such ascertainment is based on reasonable grounds. The judgment appealed by cassation has found in favour of the Appellant’s right to compensation, based on Article 7 of the sale contract dated 8.3.2004, which includes agreement between the parties on the right of the First respondent to renounce the sale against the payment of five million Qatari Riyals in compensation and refunding the amounts received as price of the property. This means that the seller has the power to renounce the sale contract under Article 7 of the contract provided he pays compensation to the purchaser and refund whatever he had received as price from him, as penalty for non-performance. Since the judgment appealed against reflects such jurisprudence and included compensation for the Appellant and refunding of the price and cheques received by the First Respondent, such judgment becomes in line with proper law. Contention against it under this reason therefore becomes baseless.

In his first reason the Appellant by cassation contends against the judgment that it involved deficient reasoning and bad argumentation , in many ways that may be summed up in that the judgment failed to apprehend what was established from the facts and documents presented before the court of first instance indicating the artificiality of the contract concluded by the seller and the second purchaser and realised in possession by the second purchaser of the sold property, and the non-payment y the second purchaser until 1.6.2007 despite getting the property registered on 2.4.2007. It is also contended that what the judgment states in response to the defence of the artificiality of the second contract is bad argumentation in favour of the validity of the said transaction, resulting from reliance by the court on weak facts, thereby rendering the judgment defective and worthy of appeal by cassation.

This contention is irrelevant. The judgment appealed by cassation has found in favour of the seller’s right to renounce the implementation of the sale contract dated 8.3.2004, by way of invoking the right under Article 7 thereof and the implementation of such agreement. It further decided compensation in favour of the Appellant, as provided by the penalty provision in the said contract. Accordingly, the contention by the Appellant against the judgment appealed by cassation that it involves deficient consideration of his defence on the artificiality of the sale contract concluded by the First Respondent and another purchaser, regardless of any viewpoint thereon, becomes irrelevant and inadmissible.

For the above reasons this appeal by cassation shall be disallowed.