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Res judicata – foreign divorce

In Clayton v Bant [2020] HCA 44 (2 December 2020) the High Court was asked to determine whether Ms Clayton’s proceedings in the Family Court of Australia (Family Court) were precluded by a ruling made by the Personal Status Court of Dubai (Dubai court) in divorce proceedings brought by Mr Bant.

Ms Clayton and Mr Bant (not their real names) were married for about five years and had a child. Ms Clayton is an Australian citizen and Mr Bant is a citizen of the United Arab Emirates (UAE). They were married in a Sharia court.

Marriage under Personal Status Law of the UAE is a formal contract in which provision can be made for a husband to pay dowry to a wife. The written contract here provided for Mr Bant to pay Ms Clayton an “advanced” dowry of AED 100,0001 and a “deferred” dowry of the same amount in the event of death or divorce.

Mr Bant owns real and personal property in the UAE and many other parts of the world. Ms Clayton owns personal property in UAE. Both own real property in Australia. Ms Clayton left Mr Bant and returned to live in Australia with their child.

When Ms Clayton commenced proceedings in the Family Court seeking parenting and, later, orders for property settlement pursuant to ss74 and 79 of the Family Law Act 1975 (Cth) (Family Law Act), Mr Bant commenced proceedings in the Dubai Court seeking a divorce.

Mr Bant also sought orders for the extinguishment of all of Ms Clayton’s marital rights associated with the divorce in terms of alimony and the deferred dowry. Ms Clayton was notified of the Dubai proceedings but did not appear.

The Dubai court made a ruling in which Mr Bant was granted an “irrevocable fault-based divorce” dissolving the marriage (Dubai ruling). The Dubai ruling went on to order Ms Clayton to refund the advanced dowry and pay Mr Bant’s legal costs. In respect of the alimony and deferred dowry, the Dubai court considered that “this subject is untimely”.

Mr Bant subsequently sought a permanent stay of the Family Court proceedings. At first instance, Mr Bant’s application was dismissed. Mr Bant successfully appealed that decision and the Full Court ordered a permanent stay.

Ms Clayton then appealed and the High Court unanimously overturned the Full Court’s decision.

Keifel CJ and Bell and Gageler JJ gave reasons for their decision in a joint judgment. Gordon and Edelman JJ each delivered separate judgments. Edelman J observed at [65] four separate rules of finality relevantly applied here.

First, res judicata (Latin for ‘a thing decided’) or the doctrine of merger. The High Court noted at [66] that the doctrine is not just about the finality of litigation. It describes the extinguishment of an independent prior right. That is, when the court order ‘replicates’ the prior right with consequences, such as enforcement mechanisms, the prior right no longer has an independent existence, instead it has merged with the order.

Second, cause of action or claim estoppel. If a judgment has finally resolved a conflict about a cause of action then the parties will be precluded from relitigating that cause of action.

Third, issue estoppel. If it is necessary for the final resolution of a dispute to determine an ultimate issue of fact or law then the parties will be precluded from denying a state of fact or law inconsistent with that resolution.

Finally, Anshun estoppel (or the extended principle in Henderson v Henderson (1843) 3 Hare 100). This rule was recognised in Henderson and Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. It is an extension of the second and third rules outlined above. The rule precludes a party from raising a cause of action or an issue in a new proceeding if it was so relevant to the subject matter of the previous, resolved, proceeding that it would have been unreasonable not to have raised it in that resolved proceeding at the time.

The High Court determined that the Dubai ruling did not give rise to res judicata because the Dubai ruling did not, and could not, determine Ms Clayton’s rights under the Family Law Act.

As for estoppel (rules 2, 3 and 4) the High Court observed at [30] that Mr Bant bore the onus of proving it. The High Court considered that Mr Bant failed to prove (or at [31] “did not deign to prove”) that it was unreasonable for Ms Clayton to raise her Family Court claims in the Dubai court (in order to establish an Anshun estoppel). But, more fundamentally, Mr Bant failed to prove substantial correspondence between between Ms Clayton’s Family Court claims and any right that might have been asserted by her and was finally determined in the Dubai court.

The High Court noted at [40] and [56] that the only rights that Ms Clayton could have legally put into issue in the Dubai court was her entitlement to the deferred dowry and to her share in any real property in Dubai (the Dubai court having no power to alter their interests in property outside the UAE). As Edelman J observed at [64], the proper characterisation of the Dubai ruling was that the only claim it resolved was the dissolution of the marriage.

See also Does what happens in Dubai stay in Dubai?

Dr Michelle Sharpe is a Victorian barrister practising in general commercial, real property, disciplinary and regulatory law, 03 9225 8722, email msharpe@vicbar.com.au. The full version of this judgment can be found at austlii.edu.au.

Footnote
1 100,000 United Arab Emirates Dirhams is currently equivalent to a little over A$35,000.

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