Clayton v Bant – An Update
On 2 December 2020, the High Court of Australia (the High Court) delivered its judgment in the matter of Clayton v Bant.1 The High Court’s decision discusses the complexities that can arise in cross-jurisdictional family law matters. It also serves as a reminder that timely advice is critical to endeavour to avoid multi-jurisdictional arguments and the associated delay to resolution.
The facts – a brief summary
- The wife is an Australian citizen and the husband is a citizen of the United Arab Emirates (UAE)
- In 2006, the parties met and commenced living together in Dubai.
- In 2007, the parties married in a Sharia court. According to the relevant UAE law, such marriage is a contract and can encompass terms relating to dowry.
- Between 2007 – 2013, the parties lived together partly in the UAE and partly in Australia.
- In 2009, the parties had a child together.
- Each party owns real and personal property in, among other countries, the UAE and Australia.
- In 2013, the parties separated. Since separation, the wife and the parties’ child have lived in Australia.
The initial court proceedings in Australia and Dubai2
Court proceedings were commenced in both Australia and the UAE. In that regard:
- In 2013, the wife commenced a proceeding in the Family Court of Australia (the Family Court) seeking parenting orders. She later amended her application to also seek a division of assets and spousal maintenance.
- In 2014, the husband commenced a proceeding in Dubai seeking a divorce. In that proceeding, he also sought extinguishment of all of the wife’s “…marital rights that are associated with that divorce in terms of all type[s] of alimony, deferred dowry and others as well as compensating him for all material and moral damage at the discretion of the court."
- The wife was notified of the Dubai proceedings but did not appear. She elected not to participate in that proceeding.
- In 2015, the Dubai Court made a ruling granting the husband an "irrevocable fault-based divorce", the effect of which was to dissolve the parties’ marriage. The ruling went on to order the wife to pay AED 100,000 (corresponding to the amount of the parties’ advanced dowry) to the husband and to pay the husband's costs of the proceeding.
- In 2015, the husband applied to the Family Court to permanently stay the financial aspects of the Australian family law proceeding. The husband argued that the wife should be prevented from pursuing her claim for a division of assets and spousal maintenance in Australia as:
- those rights arose from the same marriage that was the subject of the Dubai divorce proceeding; and
- the wife could have sought a division of assets or maintenance in Dubai, but failed to do so.
- The husband’s application for a permanent stay was rejected by the Family Court. The Court dismissed the application on the basis that the Dubai proceedings:
- Involved no issue of the wife's right to claim property of the husband, given that the law of the UAE does not confer any such right other than "in relation to property within the jurisdiction in which each have invested."
- Did not deal with any right of the wife to alimony.
The Full Court appeal3
The husband appealed the decision of the Family Court to the Full Court of the Family Court of Australia (the Full Court). The husband’s appeal was successful and the financial aspects of the Australian family law proceeding were permanently stayed.
The Full Court determined that that Dubai law provided for, among other things, a division of assets albeit not in a manner identical to Australia. As such, the relief sought by the wife in Australia was available under Dubai law and the Dubai proceeding had finally determined the underlying cause of action between the parties. The wife’s failure to seek a division of assets and maintenance in Dubai satisfied the legal principles of res judicata estoppel, such that the wife was prevented from pursuing such relief in Australia.
The High Court appeal
The wife appealed the decision of the Full Court and was granted special leave by the High Court of Australia (the High Court) to proceed with that appeal. The High Court unanimously allowed the appeal from the Full Court's decision.
In allowing the appeal and setting aside the permanent stay, the High Court held that:
- The ruling of the Dubai Court could not give rise to a res judicata estoppel as the legal right to seek orders for property settlement and spousal maintenance under the Family Law Act4 (the Act) could only be extinguished by a court making orders pursuant to the Act.
- In relation to the wife’s claim for a division of assets, the ruling of the Dubai Court was incapable of founding a cause of action estoppel or an Anshun estoppel because the right to seek a share of a joint investment property in the Dubai proceeding was not equivalent to the nature of the right to seek a property settlement under the Act.
- In relation to the wife’s claim for spousal maintenance, while the nature of the rights to alimony under the law of the UAE and to spousal maintenance under the Act were substantially equivalent, there was a significant difference in the practical consequences of the two legal rights. For that reason, the wife's choice not to claim alimony in the Dubai proceedings could provide no foundation for the operation of an Anshun estoppel.
What does the decision mean?
The High Court’s decision in Clayton v Bant illuminates the complexities that can arise in cross-border family law matters. Fundamentally, it provides significant guidance in relation to the circumstances in which parties may (or may not) be permitted to commence court proceedings relating to similar subject matter in multiple jurisdictions.
As stated above, the decision highlights the importance of taking specialist family law advice in family law matters in which the parties’ relationship has subsisted across, and their assets are owned, in multiple countries.
It is therefore extremely important that parties take specialist family law advice before taking legal steps (where possible) in circumstances where their relationship exists (or existed) in multiple countries.
If we can be of assistance, we invite you to get in touch with our experienced team of family lawyers.