By Ryan Attard, Law Clerk & Armand Mengolian, Trainee Lawyer

Can a property or maintenance case be heard in Australia when there has been a proceeding overseas?

Last year we reported on an appeal by Mr Bant (“the husband”) to the Full Court of the Family Court of Australia, who at that time succeeded in preventing Ms Clayton (“the wife”) from proceeding with an application for property settlement and maintenance in Australia following proceedings in Dubai.

The wife appealed to the High Court of Australia, which in December 2020 allowed the appeal and permitted the wife to proceed with her applications in Australia.

The wife was an Australian citizen and husband was a citizen of the United Arab Emirates (“UAE”). They met and began living together in Dubai in 2006, marrying in 2007. The couple lived partly in Australia and partly in the UAE. They separated in 2013 and the wife and the parties’ child remained living in Australia. Both parties owned real estate in Australia, the husband owned real estate in UAE, both parties had other assets in the UAE and the husband held other assets around the world. The wife commenced proceedings in Australia shortly after separation. The following year, the husband instituted proceedings in Dubai. The wife did not appear before the Dubai court and orders were made granting a divorce and ordering her to pay the husband a contracted advanced dowry of AED 100,000 together with his costs of the proceedings in Dubai.

The husband applied for a “stay” (a permanent hold) on the Australian proceedings, relying on the Dubai ruling.

The key principles considered by the Australian courts included:

  • res judicata (also known as “cause of action” or “claim” estoppel) – which provides that once a claim has been heard and decided by a court on its merits, it may not be re-litigated by the same parties; and
  • Anshun estoppel (also referred to as the “Henderson extension”) – which prevents a party to a dispute from pursuing rights in a current case which should reasonably have been pursued in previous proceedings.

The husband’s application was initially dismissed by a judge of the Family Court on the basis the wife had rights to a property settlement in Australia that weren’t available to her in Dubai and the Dubai proceedings did not address her claim for spousal maintenance. The husband appealed.

In the first appeal, the Full Court found the wife had an opportunity to reclaim a portion of the UAE properties in the Dubai proceedings and the ruling of the Dubai Court operated as a bar to her proceeding with a property claim in Australia because of both res judicata and Anshun estoppel. The Full Court also observed that the wife could have, but did not, press for alimony in the Dubai proceedings, so could not bring a claim for maintenance in Australia because of Anshun estoppel.

The wife then appealed to the High Court, which disagreed with the Full Court and unanimously allowed the appeal. The plurality of the High Court (in summary):

  • Analysed the rights of the wife to seek a property settlement and alimony/maintenance in Dubai and Australia and found those rights to be fundamentally different.
  • Considered and explained the principles of res judicata and Anshun estoppel.

In relation to the property claim:

  • Found the property rights that could be legally determined in Dubai were limited and capable of applying to a fraction of the subject matter of the rights conferred by the Australian Family Law Act. (There, the wife’s entitlement was limited to obtaining a deferred dowry and a share of real estate in Dubai. The Dubai court did not have jurisdiction in relation to property located outside of the UAE.)
  • Held the ruling of the Dubai Court in relation to property did not give rise to res judicata and the choice of the wife not to pursue aspects of a claim potentially available to her in Dubai would have been incapable of founding an Anshun estoppel.

In respect of the maintenance claim:

  • Likewise found there was a substantial difference in the limited rights conferred in Dubai for alimony, compared with the wife’s rights to spousal maintenance in Australia.
  • Held that the wife’s choice not to claim alimony in the Dubai proceedings could not provide any foundation for the operation of Anshun estoppel.

The successful High Court appeal means the wife is able to pursue a claim for property settlement and seek spousal maintenance in the Australian courts.

This case highlights the importance of obtaining specialised legal advice in all relevant jurisdictions at the outset of an international family law dispute. Taussig Cherrie Fildes has expertise in international family law cases and enjoys relationships with specialist lawyers practising in overseas jurisdictions around the world, including via the International Academy of Family Lawyers (IAFL).

Clayton v Bant [2020] HCA 44