04
Dec

High Court rules on status of overseas Divorce

The country’s highest court has ruled that orders obtained by a husband in divorce proceedings in a Dubai court did not preclude his wife from pursing property and spousal maintenance applications in Australia.

In Clayton v Bant, the High Court found that the rights of the wife under the Family Law Act continued to be available because the foreign judgement had not finally determined those issues.

The facts

An Australian lady married a gentleman from Dubai in 2007 in a Sharia  court in Dubai.

A child was born to the couple in 2009.

During the marriage, the parties lived in both Dubai and Australia. The husband owned real property in Dubai and around the world. Both parties owned real property in Australia.

The couple separated in 2013. At the time, the family was living in Australia. Upon separation, the husband returned to Dubai while the wife and child continued to reside in Australia.

Wife commences Australian proceedings

Later that year, the wife instituted proceedings in the Family Court of Australia -seeking parenting orders. That application was later amended to include property and spousal maintenance orders.

Husband commences proceedings in Dubai

In 2014, the husband commenced divorce proceedings in the Personal Status Court of Dubai. He also sought the extinguishment of all other marital rights of the wife.

A year later, the Dubai court granted the husband an “irrevocable fault-based divorce.” This meant that the marriage was dissolved and the wife could not seek property orders under the law of Dubai. The Dubai court also made an order that the wife pay the husband AED $100,000. This corresponded to a “deferred” dowry payment the wife had agreed to pay the husband upon death or divorce in a written contract at the time of their marriage.

Husband seeks stay of Australian proceedings

Responding to the wife’s Australian application, the husband applied to the Family Court of Australia to have the property settlement and spousal maintenance proceedings permanently stayed. He relied on the principles of res judicata and cause of action estoppel.

Decision of single judge of Family Court

At first instance, Hogan J dismissed the husband’s stay application.

Her honour found that in relation to the property settlement proceedings, the Personal Status Law of the United Arab Emirates (unlike the Family Law Act) made no provision for altering the interests of the parties in real property located outside the United Arab Emirates.

As to the spousal maintenance proceedings, the trial judge found that the law of Dubai only provided a limited right of alimony and that the Dubai court did not, in fact, deal with the wife’s rights to alimony.

The husband appealed to the Full Court of the Family Court of Australia.

Full Court overturns single judge decision

The Full Court unanimously allowed the husband’s appeal and ordered that the property and spousal maintenance proceedings be permanently stayed.

Their honours, took the view that:

  1. The Dubai proceedings had determined the same cause of action as that sought in the property proceedings in Australia. This gave rise to a “res judicata estoppel”.
  2. Implicitly equating spousal maintenance with alimony, the Full Family Court concluded that the wife’s failure to press for alimony in the Dubai proceedings precluded her from pursing a claim for spousal maintenance by the operation of the “Henderson extension” (see Henderson v Henderson (1843) 3 Hare 100; 67 ER 313).

High Court takes different approach

Special leave was granted to the wife to appeal to the High Court.

Unanimously allowing the wife’s appeal with costs, the High Court held that the Dubai court determination could not give rise to a res judicata because the right to seek orders for property and spousal maintenance orders under section 79 and section 74  of the Family Law Act could only “merge” in the final judicial orders of a court having jurisdiction under the Act to make such orders (and the Dubai Court did not have such jurisdiction).

Keifel CJ, Bell & Gagelar JJ stated:

“26. Once it is appreciated that the rights in issue in the property settlement proceedings and in the spousal maintenance proceedings are the statutory rights of the wife to seek orders under ss 79(1) and 74(1) of the Act, it is apparent that the ruling made by the Dubai Court cannot give rise to a res judicata in the strict sense in which that term continues to be used in Australia[31]. The rights created by ss 79(1) and 74(1) cannot “merge” in any judicial orders other than final orders of a court having jurisdiction under the Act to make orders under those sections. The rights of the wife to seek orders under ss 79(1) and 74(1) continue to have separate existence unless and until the powers to make those orders are exercised on a final basis and thereby exhausted[32].”

Their honours took the view that:

  • As to the property proceedings, the Dubai court decision was not capable of founding a cause of action estoppel or anshun estoppel because the right to seek a share in joint investment property in the Dubai proceedings was not the same as the rights available under the Family Law Act.
  • With regard to spousal maintenance, although alimony in the Dubai law and spousal maintenance under the Australian law were substantially similar, there was a significant difference because it was not shown that alimony can be claimed after the date of divorce while spousal maintenance can be. The wife’s choice not to claim alimony in Dubai could not be the basis for the operation of an anshun estoppel.

The High Court also confirmed that the common law doctrine of estoppel continued to apply to proceedings under the Family Law Act.

“27.    For the ruling made by the Dubai Court to preclude the wife from pursuing the property settlement proceedings and the spousal maintenance proceedings, that preclusion can occur, if at all, through the operation of the common law doctrine of estoppel. No argument is made that the operation of that common law doctrine is excluded by the scheme of the (Family Law) Act.”

 Other useful cases

Other family law cases that deal with inter-country disputes include:

  • Henry v Henry [1996] HCA 51; (1996) 185 CLR 571
  • In the Marriage of Caddy and Miller (1986) 84 FLR 169
  • Jasmit v Jasmit [2014] FCCA 972
  • Hughes & Hughes [2014] FamCA 12

Some words of warning

  • There are varying degrees of difference and similarity between Australian family law legislation and that of other countries.
  • Each case depends on its own facts. The nature of the overseas family law legislation and the particular legal proceedings instituted overseas are crucial to the issue of jurisdiction.
  • Where parties have a choice of which jurisdiction to commence proceedings in, they should obtain legal advice from a family law solicitor experienced in inter-country family law litigation before commencing or responding to proceedings.