By Maria Hook (University of Otago)
In Almarzooqi v Salih [2021] NZCA 330, the Court of Appeal recently considered whether a judgment by a Dubai court ordering the defendant, Mr Salih, to pay a marriage dower was enforceable in New Zealand at common law. The High Court had refused enforcement on the basis that the Dubai Court did not have personal jurisdiction over Mr Salih, and the Court of Appeal upheld the High Court’s decision.
We have outlined the background to the proceeding in a previous post on this blog. Ms Almarzooqi, the claimant, and Mr Salih met on an Islamic dating site. Ms Almarzooqi was living in Australia at the time, and Mr Salih was living in New Zealand. They subsequently got married in Dubai in accordance with Islamic law, which involved the parties entering into a contract of marriage (nikah). This contract provided that Mr Salih would pay Ms Almarzooqi a deferred dower (also known as a mahr) of about $212,000 in the event of Mr Salih’s death or the parties’ divorce. The marriage did not last long. Ms Almarzooqi, a citizen of the United Arab Emirates (UAE), moved to New Zealand to live with Mr Salih, who had both Iranian and New Zealand citizenship. After a few months the couple separated, and Ms Almarzooqi eventually returned to UAE to file for divorce on the ground of domestic abuse. The Dubai Court awarded a default judgment in Ms Almarzooqi’s favour, ordering Mr Salih to pay the mahr. Ms Almarzooqi subsequently returned to New Zealand, where she continues to reside, and issued proceedings in the High Court, pleading two causes of action: enforcement of the UAE judgment, and a claim for breach of the contract of marriage.
The High Court dealt with the former claim first, declining the application to enforce the judgment on the basis that the Dubai Court did not have personal jurisdiction over Mr Salih ([2020] NZHC 2441). In this post, I provide a brief analysis of the Court of Appeal’s judgment, before turning in more depth to the remaining issues now facing the parties in the context of Ms Almarzooqi’s claim for breach of contract.
I Whether the Dubai Court had jurisdiction over Mr Salih for the purposes of enforcement of the Dubai Court’s judgment
The plaintiff made two main arguments on appeal. First, it argued that the Dubai Court did not require personal jurisdiction over Mr Salih because its decision to enforce the mahr was a decision in rem. Second, it argued that the Dubai Court had jurisdiction on the basis of the principle of reciprocity, which would have required the New Zealand court to recognise the Dubai Court’s jurisdiction based on New Zealand rules of personal jurisdiction.
The Court of Appeal rejected both arguments. It acknowledged that reciprocity (or connection) played some relevance in the context of the recognition of foreign judgments as to status (at [33], [41]-[58], citing The Conflict of Laws in New Zealand (CLNZ) at 5.96 and 9.4). However, the decision to enforce the mahr was not a decision as to status, or, indeed, a decision in rem (see the explanation of the concepts of personal jurisdiction and subject-matter jurisdiction at [41], citing CLNZ at 2.32-2.33). This meant that there was no basis for departing from the general principle that “New Zealand courts do not recognise the jurisdiction of a foreign court over a non-resident by reference to the principles, reflected in rr 6.27-6.29 [of the High Court Rules], in determining whether they have jurisdiction over a non-resident” (at [33], citing CLNZ at 5.96).
Although the Court of Appeal’s conclusion was correct, the case demonstrates the unduly restrictive nature of New Zealand’s existing framework for the enforcement and recognition of foreign judgments. The Dubai Court, as the Court that had also granted the divorce, was clearly the appropriate forum to determine the enforcement of the mahr (this is also implicit in s 182 of the Family Proceedings Act 1980, discussed further below). In these circumstances, it is unfortunate that the plaintiff’s only option now is to bring her claim again in the New Zealand court.
II Ms Almarzooqi’s claim for breach of contract
This claim may raise some difficult questions, covered briefly in my previous post on the proceeding. In particular, the court might be faced with the following issues:
- How are claims for the enforcement of a deferred mahr agreement to be characterised for choice of law purposes?
- Based on this characterisation, what is the applicable choice of law rule and how is it to be applied to the case at hand? (For example, if the matter is characterised as contractual, what is the proper law of mahr agreements?)
- If the applicable law is New Zealand law, are mahr agreements enforceable as a matter of substantive law?
- If the applicable law is foreign law, and assuming that the agreement is enforceable pursuant to that law, is it nevertheless unenforceable on the basis that application of that law would be contrary to New Zealand public policy?
In this post, I offer some further thoughts on how these questions could be resolved in a New Zealand court.
A How are claims for the enforcement of a deferred mahr agreement to be characterised for choice of law purposes?
The process of characterisation requires the court to have regard to the purposes or functions of the competing choice of law rules, as well as the function(s) of the substantive rules of law that would be applicable as a result of those choice of law rules. The goal is to identify the most appropriate law to govern the issue, which means that the court must be prepared to re-frame the issue from a conflict of laws perspective, unconstrained by particular notions or distinctions of domestic law: see Raiffeisen Zentralbank Österreich AG v Five Star General Trading LLC [2001] EWCA Civ 68, [2001] QB 825 at [27]-[29]; Haugesund Kommune v Depfa ACS Bank [2010] EWCA Civ 579, [2012] QB 549 at [41]-[47]; CLNZ at 4.B.2.
This exercise is particularly challenging in the context of the deferred mahr, which has been said to serve a range of functions (that may, moreover, vary between regions, cultures and legal systems). On the one hand, the deferred mahr can make up for modest or inexistent entitlements by the wife to relationship property or statutory maintenance. In Islamic legal systems, the mahr therefore serves at least a supplementary function to support the wife financially following her divorce. On the other hand, the mahr has also been ascribed a transactional function. Although provision of a mahr is compulsory, it is based on a contract and involves a promise by the husband to pay a certain sum of money or make a specified gift. The wife negotiates the amount (or size) of the mahr in light of – amongst other things – the social and economic costs that she will suffer in the case of divorce. More fundamentally, the mahr may be said to be given in exchange for the husband’s unilateral right of divorce; and if the wife wishes to end the marriage, she can use the mahr as a bargaining tool to obtain her husband’s consent to the divorce by agreeing to forego part or all of the mahr.
For helpful commentary on the functions of the mahr (including from a comparative perspective), see P Fournier “Flirting with God in Western Secular Courts: Mahr in the West” (2010) 24 International Journal of Law, Policy and the Family 67; K Spencer “Mahr as Contract: internal pluralism and external perspectives” (2011) 1 Oñati Socio-legal Series; S Rutten “The Struggle of Embedding the Islamic Mahr in a Western Legal System” in R Mehdi and J Nielsen (eds) Embedding Mahr (Islamic Dower) in the European legal system (DJØF Publishing, Aarhus, 2011) 113; N Yassari “The Islamic Mahr in German Courts: Characterization in Private International Law and Accommodation in German National Family Law” R Mehdi and J Nielsen (eds) Embedding Mahr (Islamic Dower) in the European legal system (DJØF Publishing, Aarhus, 2011) 193; D Schawlowski “The Islamic Mahr in German and English Courts” (2010-2011) 16 Yearbook of Islamic and Middle Eastern Law 147; JR Bowen “How Could English Courts Recognise Shariah?” (2010) 7 University of St Thomas Law Journal 411. For a recent German judgment grappling with the question of the characterisation of the mahr for the purposes of private international law, see the German Federal Court’s in BGH XII ZB 380/19, 18 March 2020 (and for a short commentary on the decision in English, see this blog post by Matthias Lehman).
(i) The particular issue to be characterised
How the mahr is to be characterised for choice of law purposes should depend on the particular issue that has arisen before the court. For example, if the question is whether the mahr may operate as an agreement to contract out of an obligation to share or divide relationship property, then the question relates to the property consequences of personal relationships (see CLNZ at 9.C.2). Similarly, if the question is whether the mahr may contract out of statutory obligations to pay maintenance, the question clearly falls within the choice of law rule governing maintenance obligations (see CLNZ at 9.C.3). More difficult are cases where the mahr is sought to be recognised as part of a settlement of the spouses’ property or financial obligations following divorce or separation. For example, an issue might arise whether a particular asset is to be treated as the wife’s separate property to reflect her entitlement to the mahr, or the court might have to determine whether the mahr should be a factor in determining the overall fairness of the property allocation. It seems that a characterisation based on the property consequences of the relationship would again be appropriate, albeit with a possible incidental question whether there is an enforceable obligation to pay the mahr in the first place.
This latter question is the principal issue arising in Almarzooqi, which is solely about the enforcement of a promise to pay the mahr, unrelated to any claims to specific property or statutory maintenance. The claim is brought in contract. However, based on the principles of characterisation outlined above, the form of the action is not in itself determinative of the question of characterisation (cf the following comment in my previous post, which, on reflection, does not adequately reflect the need for an internationalist and functional approach to characterisation: “if there were a basis in New Zealand contract law to give effect to deferred dowry contracts … then it is very likely that characterising the issue as contractual for the purposes of the conflict of laws was the right approach”). Because the mahr does not form part of New Zealand domestic law, contract may simply be the only available vehicle to bring the claim. Having regard, then, to the functions of the mahr outlined above, the question is whether the husband’s personal obligation to pay the mahr is best characterised as a matter relating to the property consequences of relationships, maintenance or contract.
(ii) Choice of law rules governing the property consequences of personal relationships?
There are some functional differences between relationship property laws and the obligation to pay the mahr. The function of relationship property laws is to allocate property between parties to a personal relationship. The obligation to pay the mahr, however, is not tied to property that is in existence at the time of divorce or separation. Moreover, there are limited functional similarities between mahr agreements and relationship property agreements (see Spencer at 13-14). Unlike relationship property agreements, mahr agreements do not seek to protect certain assets from a spouse. Their effect is transactional – that is, they envisage a transfer of assets – and it is in this sense that they may also be said to serve a function that, in New Zealand, would be the domain of the default rules of the Property (Relationships) Act 1976 (PRA).
On their own, these concerns would not be determinative. There is an argument that courts should take a relationship-focused and inclusive approach to choice of law governing the property consequences of personal relationships, enabling the court to make a holistic assessment of a couple’s property and financial obligations at the end of their relationship (M Hook “A First Principles Approach to Couples’ Property in the Conflict of Laws” (2019) 15 Journal of Private International Law 257). However, this is not currently the approach taken in New Zealand. The existing choice of law rules on relationship property are property-focused and fragmented. They are also largely inward looking, and as will be seen in the next sections on maintenance and contract, a lex fori rule would not be the most appropriate choice of law rule for mahr agreements.
It is true that application of the same governing law to both issues (ie the property consequences of personal relationships and the husband’s obligation to pay the mahr) would assist the court in reaching an overall fair and coherent result. If the issues are split across two (or more) governing laws, there is a risk that the applicable rules will be difficult to reconcile. However, on balance, this does not seem to be a sufficient reason to characterise the husband’s obligation as going towards the question of relationship property (but cf Yassari).
(iii) Choice of law rules governing maintenance?
This leaves the question whether the obligation is more properly characterised as relating to contract or maintenance. Islamic legal systems provide for rights of maintenance that are distinct from the wife’s entitlement to the mahr. In Almarzooqi, for example, the Dubai Court’s order to pay the mahr was in addition to a requirement to pay a certain amount of “alimony”. However, this does not necessarily mean that the two should be characterised differently for choice of law purposes (but cf Yassari at 208). There is clearly an overlap in functions because both provide the wife with financial support in case of divorce.
Yet there are differences, too. Maintenance is focused on offering a degree of minimum protection, which is assessed on the basis of the applicant’s needs and the respondent’s ability to pay (s 64, Family Proceedings Act 1980). Thus, in New Zealand, statutory maintenance rights are considered to be of such public importance that they are always governed by the law of the forum. The mahr, on the other hand, gives effect to the parties’ bargaining, regardless of the husband’s ability to pay, and may go well beyond covering the wife’s needs. Like maintenance, it also raises issues of public policy. By enforcing the mahr, the law contributes to the regulation of the parties’ personal relationship (more specifically, of the terms of the parties’ marriage and their potential divorce). In New Zealand, divorce – like maintenance – is governed by the law of the forum. Does this mean that the enforcement of the mahr raises questions of such a sensitive nature that it should be characterised as falling within the lex fori rule?
(iv) Choice of law rules governing contract?
On balance, I think that contract choice of law rules offer a better fit, even though the mahr is a compulsory component of the marriage contract. Applying contract choice of law rules to determine whether there is an obligation to pay the mahr would not interfere with the scope of the lex fori rule for maintenance and divorce. In other words, a foreign proper law of the mahr would not take away any minimum protections provided by the New Zealand rules on maintenance, or restrict the parties’ access to divorce under New Zealand law. In these circumstances, there is limited justification for immediately prioritising New Zealand family values over the interests of the spouses (and, to some extent, of the community or communities to which they are closely connected). It would be more appropriate, therefore, to apply a law that reflects the reality of the parties’ lives and expectations at the time they entered into the agreement (cf Art 8(4), Hague Protocol on the Law Applicable to Maintenance Obligations (signed 23 November 2007, entered into force 1 August 2013)). Contract choice of law rules are sufficiently flexible to achieve this.
This approach, which was adopted in Shahnaz v Rizwan [1965] 1 QB 390 (DC) and in Almarzooqi v Salih [2020] NZFLR 251, would also avoid some of the problems that courts have encountered when attempting to incorporate the mahr into Western family law. Because New Zealand substantive law is not familiar with the mahr, application of the lex fori can have the effect of distorting its function (see, in particular, Fournier). Under contract choice of law rules, on the other hand, the applicable law may be a law that is familiar with the concept, and conflict of laws rules on the proof of foreign law would ensure that the court’s assessment is based on adequate evidence. Moreover, the court would have an easier task when determining whether certain rules or incidents of the mahr are inconsistent with values of New Zealand family law. For example, a court might be unable to accept that, as a matter of New Zealand substantive law, a wife should not be entitled to the mahr because she was the one who initiated a (consent-based) divorce; but it might be comfortable accepting such a proposition as a matter of foreign law and refusing to invoke the public policy exception (see below).
B If the matter is characterised as contractual, what is the proper law of mahr agreements?
Contract choice of law rules generally call for the application of the law the parties intended to be applicable or, in the absence of an intention to that effect, the law of the country with which the contract is most closely connected (CLNZ at 6.B.1).
Courts have refined the application of these rules in the context of particular contracts. For mahr agreements, courts should be prepared to consider the parties’ relative bargaining power and any information asymmetries when determining the validity of the choice of law agreement. In the absence of a valid agreement, they should give weight to the parties’ expectations, their cultural, religious and social connections, and the wider normative context or background of their marriage (including the place of the marriage).
The function of the mahr is to protect the interests of the wife, so the court should focus on connecting factors that are consistent with this function (see CLNZ, ch 4 at [8]; for an example of a choice of law rule that aims to protect a certain group of claimants, see Hague Protocol on the Law Applicable to Maintenance Obligations, Art 3). The country of the wife’s nationality or residence may assume particular relevance. It would also usually be in the wife’s interest that the mahr be governed by a law that knows and recognises the mahr (as opposed to a law that, say, treats the mahr as a purely moral commitment).
In Almarzooqi ([2020] NZFLR 251), in the context of the High Court’s determination of the plaintiff’s application for security of costs, the Associate Judge concluded that the proper law of the agreement was New Zealand law, because “the overwhelmingly most important consideration in this case is that, although the parties married and entered into their contract in the UAE, it was their joint intention at the tie that the contract would govern their relationship as a married couple in New Zealand” (at [47]). I have criticised this reasoning in my previous post but add here that the Court should have also had regard to the wife’s interest in the application of a law that knows the mahr and that is closely connected to her, which here seemed to be the law of the UAE.
C If the applicable law is New Zealand law, are mahr agreements enforceable as a matter of substantive law?
If New Zealand law applies – whether by virtue of a lex fori rule or a multilateral choice of law rule – the question arises whether mahr agreements are in principle enforceable under rules of New Zealand family and contract law.
There is nothing in the Property (Relationships) Act, Family Proceedings Act or Child Support Act 1991 that would directly prohibit such an agreement. On the contrary, s 62(2) of the Child Support Act expressly recognises that liability to pay maintenance may arise under ordinary contractual principles (Townshend v Bellamy 3 June 2005, CIV-2004-483-393 (HC Wanganui) at [10]; see Margaret Briggs “Marital Agreements and Private Autonomy in New Zealand” in Jens Scherpe Marital Agreements and Private Autonomy in Comparative Perspective (Bloomsbury Publishing, 2012) 256 at 266).
There is also no general rule of contract that would prevent parties from entering into a binding marriage contract. In Radmacher v Granatino [2010] UKSC 42, [2011] 1 AC 534, Lord Phillips said:
“… the old rule that agreements providing for future separation are contrary to public policy is obsolete and should be swept away . . . If parties who have made such an agreement, whether ante- nuptial or post- nuptial, then decide to live apart, we can see no reason why they should not be entitled to enforce their agreement.”
More specifically, common law courts have recognised in principle that mahr agreements may be enforceable as contracts (see, eg, Uddin v Choudhury [2009] EWCA Civ 120; Mohamed v Mohmend [2012] NSWSC 852; the decision in Shahnaz v Rizwan [1965] 1 QB 390 (DC) seemed to be based on an application of “Mohammedan law” as given effect by the law of India).
The reasons why enforcement of a deferred mahr may be contrary to public policy have been widely discussed in the literature: see, eg, Spencer for a useful account. There are challenging questions here to what extent the law is capable or willing to reflect the needs of a pluralist society. In a New Zealand context, an additional point is that s 182 of the Family Proceedings Act, which provides the court with powers to vary or cancel any agreement or settlement relating to marriage, would not be available where the spouses divorced abroad. This is unfortunate, because s 182 might prove to be a useful mechanism to deal with any public policy concerns arising from the enforcement of a mahr.
D If the applicable law is foreign law, and assuming that the agreement is enforceable pursuant to that law, is it nevertheless unenforceable on the basis that application of that law would be contrary to New Zealand public policy?
If the promise to pay the mahr is governed by foreign law, the New Zealand court may still have to consider whether application of that law (or of particular provisions of that law) would be contrary to public policy. The threshold is often said to be a high one but may depend on a number of factors, including the connection of the case to New Zealand and the values that would ordinarily support the application of the foreign law (see CLNZ at 4.B.5(b)):
- The more closely connected the case is to New Zealand, the more appropriate it may be to adopt a lower threshold. For example, English courts have readily invoked the public policy exception to deny enforcement to contracts in restraint of trade in circumstances where the case had a close connection to the forum (see, eg, Duarte v Black & Decker Corp [2007] EWHC 2720 (QB), [2008] 1 All ER (Comm) 401 at [56]-[63]). In Almarzooqi, the spouses were – and still are – resident in New Zealand, which might make it more appropriate to apply the exception than in a case that has overwhelmingly foreign connections.
- The values that would ordinarily support the application of the foreign law should be evaluated in the context of the particular issue before the court. Where the issue is linked to general areas of public policy, the exception is a useful tool to modulate the effect of multilateral choice of law rules. The exception here operates as a more flexible alternative to lex fori rules or overriding mandatory rules. In this way, the public policy exception could play an important part in ensuring that mahr agreements need not be submitted to a general lex fori rule (see above). Where the spouses are divorced in New Zealand, the court would also be able to rely on s 182 of the Family Proceedings Act instead of the public policy exception (see above), assuming that s 182 has overriding mandatory force and is not merely self-limiting (see CLNZ at 4.4 and B.5.a.ii).
The overall question is whether the effects of upholding the mahr would be contrary to public policy in the circumstances of the particular case. There seem to be at least a couple of scenarios that might trigger the exception in this context:
- The exception could be relied upon where enforcement of the mahr would have the effect of undermining the purpose of the agreement and distort the function of the mahr. This might occur, for example, where enforcement of the mahr would expose the husband to double liability (under the mahr and, say, New Zealand rules of relationship property), in circumstances where the parties had entered into the mahr on the assumption that the wife would have no entitlement to share in the husband’s property.
- Depending on the facts of the case, the mahr might come close to a penalty for divorce (cf Mohamed v Mohmend [2012] NSWSC 852 at [53)). The fact that it is payable on divorce – directly disincentivising the husband from leaving the relationship – may not in itself be problematic. After all, relationship property laws and maintenance laws can have a very similar effect, discouraging a party from pursuing a separation because it would result in a significant reduction in wealth. But what if the relationship was a relationship of short duration, the divorce has had limited – or no – financial or social implications for the wife, and the wife had equal access to divorce (see Rutten at 4.2-4.3)? It is conceivable that the public policy exception could be triggered in such a case.
In Almarzooqi, the parties’ relationship was a relationship of short duration. The plaintiff obtained a fault-based divorce in the Dubai Court, and it is unclear whether she would have had a general right of divorce through the New Zealand court (this would have required that either she or the defendant was domiciled in New Zealand at the time: Family Proceedings Act, s 37(2)). What is more, divorce in accordance with Islamic law might have been the only culturally appropriate option for the parties. There has been no evidence so far of the financial or social implications of the divorce, but the fact that the plaintiff resides in New Zealand cannot be taken to mean that there were, or are, no such implications.
In the context of Ms Almarzooqi’s claim for enforcement of the UAE judgment, the High Court concluded that enforcement would not have been contrary to public policy because “New Zealand places a high value on cultural and religious autonomy” ([2020] NZHC 2441 at [62]). In my view, the Associate Judge was right to conclude that enforcement of a mahr would not in principle be contrary to public policy, but this does not mean that application of a foreign law giving effect to an obligation to pay a mahr may not be contrary public policy on the facts of the particular case.
III Conclusion
Courts face a challenging task when asked to enforce, or take account, of a promise to pay a mahr. Regardless of the particular approach that is adopted, it is crucial that courts are alive to the possible interrelationship between relationship property, maintenance and the obligation to pay the mahr, and that they make use of all available tools (including the principle of adaptation: CLNZ at 4.B.4(b)) to ensure the harmonious application of these different regimes. For example, an enforceable obligation to pay the mahr may be a factor in assessing the plaintiff’s entitlement to relationship property or maintenance, but courts should be very careful to conclude that the mahr amounts to a contracting out agreement. Fortunately, Almarzooqi v Salih does not seem to give rise to such concerns.
