If you have separated and you have accumulated assets in multiple countries including countries other than Australia, as occurred in Clayton & Bant, it is vital that you obtain advice from both jurisdictions in relation to your rights as a Court in another country may take a different approach to a family law dispute, than the approach adopted in Australia.
Usually these kinds of circumstances arise where two parties have lived and worked in multiple jurisdictions and so they have accumulated assets in both.
The Family Law Act is applicable in Australia but if orders are made in the Australian Family Courts that are not enforceable in another country, problems arise.
If you have assets in multiple countries, you should obtain advice in both jurisdictions as to your property settlement rights.
Whilst a Court order made in Australia can deal with assets that are in an overseas jurisdiction, obtaining advice from a lawyer in both countries where assets are held is important in order to ensure that any orders made are enforceable in both countries.
If you have assets located in Australia and another country, questions you should ask yourself are:
- Does the Federal Circuit & Family Court of Australia have jurisdiction to determine this case?
- Is there a foreign jurisdiction that would also be able to determine the case?
- What are the advantages and disadvantages to the case being heard in a jurisdiction other than Australia?
- Is the Federal Circuit & Family Court of Australia the appropriate jurisdiction to hear the case?
- If you choose Australia to file an application for property settlement, is the order made in Australia is enforceable in the other country?
When you obtain advice from a lawyer in a foreign jurisdiction, we can liaise with them to make sure that any order that is made in Australia, is legally enforceable in the other country.
Issuance of proceedings in multiple jurisdictions
Difficulties can arise, as did occur in Clayton & Bant, when parties have assets in different jurisdictions as to the appropriate forum to hear the matter.
What if proceedings have been commenced in two different jurisdictions? Which jurisdiction is more appropriate to determine the matter?
In Clayton & Bant, this precise issue arose and the court had to determine (a) which jurisdiction was most appropriate to determine the matter and (b) whether or not the Australian Family Court had jurisdiction to determine financial matters, in circumstances where divorce orders had already been made in the United Arab Emirates, finalising financial matters between the parties including with respect to division of assets and spousal maintenance.
Clayton & Bant  HCA 44
Clayton & Bant – The Facts
The facts of Clayton & Bant are as follows:
The wife was an Australian citizen and the husband 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 owned real and personal property in the UAE and Australia.
In 2013, the parties separated. Since separation, the wife and the parties’ child lived in Australia.
Court proceedings were initially commenced in both Australia and the UAE. In that regard:
In 2013, the wife commenced a proceeding in the Family Court of Australia, 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 (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 of Australia 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.
Clayton & Bant – The Family Court Appeal
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.
Clayton & Bant – 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 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 Family Law 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.
Take away points
Clayton & Bant highlights the risks associated with not acting quickly to obtain advice about jurisdiction and not participating in overseas proceedings. Clients should consider in detail which forum to commence proceedings in and proceedings should be commenced urgently to secure that jurisdiction.
It is also important that your lawyer provides you advice as to which jurisdiction can provide a more complete resolution of all issues in dispute between the parties.
Property Settlement proceedings may be instituted in the Family or Federal Circuit Court of Australia, in relation to matrimonial causes under the Family Law Act 1975, by virtue of s39(1) and (4), and in relation to de facto matters by virtue of s39A and s39B, conditional on a party to the proceedings being an Australian citizen, ordinarily resident or present in Australia on date the application is filed. Per section 31(2), the jurisdiction of the Family Court extends to persons and things outside Australia.
If you have a question in relation to a multi-jurisdictional issue such as that which arose in Clayton & Bant, we strongly recommend you obtain legal advice from one of our family law experts about your rights, so that the jurisdiction of your choice, if appropriate, can be promptly secured.
Contact us on 3465 9332 to book an reduced rate consultation with one of our Brisbane Family Lawyers to have a confidential discussion about your individual circumstances, so you can make smart decisions following separation, that will save you money and emotional stress.