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Property – High Court sets aside permanent stay order – Full Court erroneously applied res judicata and Anshun estoppel where there was “substantial difference” between dowry proceedings in Dubai and s 74 of the Act

In Clayton v Bant [2020] HCA 44 (2 December 2020) the High Court (Keifel CJ, Bell, Gageler, Gordon & Edelman JJ) considered Bant & Clayton (No. 2) [2019] FamCAFC 200 (summarised at our archived case notes – property under “forum non conveniens”) where the Full Court permanently stayed a wife’s application for property and spousal maintenance as she had failed to contest divorce proceedings in Dubai.

A citizen of the United Arab Emirates (UAE), the husband issued divorce proceedings in Dubai in 2014. The wife did not appear, such that a Dubai court granted the husband an “irrevocable fault based divorce” ([8]) and ordered the wife to repay an amount of an advanced dowry and costs.

The husband then sought a permanent stay of the wife’s property and spousal maintenance proceedings in the Family Court of Australia, arguing res judicata. Although unsuccessful at first instance, the Full Court stayed the proceedings, finding that the Dubai proceedings had determined the same cause of action and the wife’s failure to pursue her claim in Dubai meant she was estopped from pursing a spousal maintenance claim in the Family Court.

The majority of the High Court (Kiefel CJ, Bell and Gageler JJ) said (at [26]):

“Once it is appreciated that the rights in issue in the property settlement proceedings and in the spousal maintenance proceedings are the statutory rights of the wife to seek orders under ss 79(1) and 74(1) of the Act, it is apparent that the ruling made by the Dubai Court cannot give rise to a res judicata in the strict sense in which that term continues to be used in Australia. The rights created by ss 79(1) and 74(1) cannot ‘merge’ in any judicial orders other than final orders of a court having jurisdiction under the Act to make orders under those sections. The rights of the wife to seek orders under ss 79(1) and 74(1) continue to have separate existence unless and until the powers to make those orders are exercised on a final basis and thereby exhausted.”

The majority continued (from [34]):

“ … [T]he focus of the common law doctrine of estoppel is on ‘substance rather than form’. The doctrine looks not for absolute identity between the sources and incidents of rights asserted or capable of being asserted in consecutive proceedings. The doctrine looks rather for substantial correspondence between those rights. Enough for its operation is that the rights are of a substantially equivalent nature and cover substantially the same subject matter. ( … )

[40]  … The property rights legally capable of being put in issue in the Dubai proceedings were limited to the entitlement of the wife to obtain deferred dowry from the husband and the entitlement of either of them to a share in such real property in Dubai as she or he might have participated with the other in developing. Those rights were not in any degree equivalent in nature to the right to seek the discretionary alteration of property interests conferred by s 79(1) of the Act. And those rights were in any event capable of applying to only a fraction of the subject matter of the right conferred by s 79(1), which encompasses all real and personal property of either or both parties to the marriage wherever located.

[41] For those reasons, the ruling of the Dubai Court would have been incapable of founding a cause of action or claim estoppel operating to preclude the wife from asserting a right to seek an order under s 79(1) of the Act even if the ruling had determined the non‑existence of an entitlement to a share in some real property in Dubai, which it plainly did not. For the same reasons, the choice of the wife not to claim a share in such real property as she might have participated with the husband in developing in Dubai would have been incapable of founding an Anshun estoppel even assuming that some such real property existed and even assuming that her choice not to claim it was unreasonable in the context of the Dubai proceedings.

[42] Turning to the spousal maintenance proceedings, there is little difficulty in characterising the right of the wife to seek alimony under the Personal Status Law as substantially equivalent in nature to the right which she has under s 74(1) of the Act to seek an order for the provision of maintenance by the husband. The circumstances that the quantum might be different or that it might be informed by different discretionary considerations is neither here nor there. There appears nonetheless to be a substantial difference in the coverage of the two rights: the former not being shown to be available to be claimed beyond the period up to the date when the irrevocable fault-based divorce took effect; the latter being available to be claimed beyond that date. The wife’s choice not to claim alimony in the proceedings instituted by the husband in the Dubai Court could in those circumstances provide no foundation for the operation of Anshun estoppel even assuming her choice not to claim alimony to have been unreasonable in the context of the Dubai proceedings.

[43] The appeal must be allowed with costs. The orders of the Full Court other than the order granting leave to appeal from the judgment of Hogan J and those dealing with costs must be set aside. In their place, the appeal from the judgment of Hogan J must be dismissed.”

Gordon J and Edelman J agreed, each providing separate judgements.

 

Property – Wife fails in attempting to have related company pay partial property settlement of $1.1 million – Section 90AE orders against third parties incapable of reversal

Property – Appeal against final property orders conceded – Trial judge failed to consider whether it was just and equitable to make any order under s 90SM(3) per Stanford

Property – Findings of fact as to the parties’ relationship continuing beyond 1 March 2009 were required before the Family Court could declare it had jurisdiction to set aside a prior property adjustment order made under the Property (Relationships) Act 1984 (NSW)

Children – Court erred by conflating summary dismissal hearing and Rice and Asplund hearing – Failure to allow father to respond to mother’s late material procedurally unfair

Property – Property settlement order not a money judgment required to be proved in bankruptcy – Section 59A Bankruptcy Act 1966 – Final property settlement order made in February 2012 exhausted jurisdiction under Part VIII of the Act such that there was no jurisdictional basis for the wife’s application for further relief in 2020

Children – Application by non-parent to intervene dismissed due to failure to particularise final orders sought