By Armand Mengolian, Law Clerk

The wife appealed the below decision to the High Court of Australia, which in December 2020 allowed the appeal and permitted the wife to proceed with her applications in Australia. Refer to updated case law “Can a property or maintenance case be heard in Australia when there has been a proceeding overseas?” dated 5 March 2021.

No order appropriate by an Australian court where financial litigation already dealt with by a foreign court

On 18 September 2018, the Family Court dismissed an application of Mr Bant (“husband”) that the application for final property settlement orders and orders for spousal maintenance filed by Ms Clayton (“the wife”) be permanently stayed. The husband sought leave to appeal, and if leave is granted, to appeal that order.

The husband contended that orders made in a Dubai Court, gave rise to res judicata estoppel and would therefore bar the wife from continuing proceedings in Australia.

The primary judge was required to consider whether the proceedings in Dubai determined the same cause of actions sought to be litigated in the proceedings brought by the wife in the Family Court of Australia.

Her Honour considered that the issues dealt with in the Dubai proceedings and by the Dubai divorce did not include the issue of the existence of a party to marriage’s right to claim property from the other party because such a right does not exist in Dubai.

Her Honour held that the law of Dubai did not afford rights to seek property settlement or adjustment orders of the kind prescribed by section 79 of the Family Law Act 1975 (Cth) (“Act”) following separation or divorce. Therefore, the divorce proceedings in Dubai did not determine any rights of the wife analogous to those afforded to her by s 79 of the Act because the wife didn’t have such rights in Dubai. This would mean that res judicata estoppel would not bar the wife from continuing proceedings in Australia.

The appeal grounds contended that the primary judge was wrong in her conclusion that the law of Dubai did not allow for redistribution of the parties’ assets. The relevant provisions in the Dubai law did provide, for the adjustment of property between spouses on divorce and thereby, the wife, with the means by which she could have sought such a property adjustment.

Although the operation of section 79 of the Act may have produced perhaps a more advantageous result for the wife, the real question to be determined was whether the Dubai law finally determined the financial consequences of the marital breakdown between the parties. The Appeal Court found that it did. Therefore, the primary Judge had erroneously concluded the proceedings in Dubai left open the question of property adjustment which could be considered in the Australian proceedings. In effect, the principles of res judicata operate to prevent the wife from attempting to make such a claim in the Family Court of Australia.

The husband also challenged the primary judge’s conclusion that the question of alimony had not been determined by the Dubai Court, leaving it to be litigated in the Australian proceedings. The primary judge concluded that the Dubai divorce and judgement did not deal with the issue of alimony at all, but rather described it as “untimely”. Thus, leaving it open to the wife to pursue in Australia.

The husband’s challenge was successful on the ground that it was immaterial whether the husband obtained a favorable outcome in relation to alimony but that the Dubai law provided a mechanism for the determination of alimony. It was determined as being “untimely” because the wife had not pressed her claim. The wife therefore couldn’t now bring a claim for spousal maintenance and thus, nothing remained for the wife to agitate in the Family Court of Australia proceedings.

The Court allowed the appeal and ordered the wife’s proceedings for adjustment of property pursuant to section 79 of the Act and her application for spousal maintenance be permanently stayed.

Bant & Clayton (No. 2) [2019] FamCAFC 200