When parties enter into a marriage or a marriage-like relationship, they do so with the expectation that the relationship will last. Parties make financial decisions and adjust their economic expectations in light of the union they have entered into. So when the relationship does not last, most legal systems provide for rules to ensure a fair financial outcome between the parties. In New Zealand, we have laws on the allocation of relationship property and on the payment of maintenance, including rules to give effect to “pre-nuptial agreements”, relationship property agreements and maintenance settlements. Needless to say, such agreements or arrangements might differ in style and substance from those customarily relied upon – and given effect to – in other countries, even though they may serve similar functions. In some Muslim countries, for example, it is customary to enter into a marriage contract that entitles the wife to a “deferred” dower or dowry, which becomes payable upon divorce.
The High Court recently considered whether such an arrangement would be enforceable in the New Zealand courts, in the context of an application for security for costs (Almarzooqi v Salih  NZHC 1049). Associate Judge Johnston answered this question in the negative. In this post, I ask whether the Judge was right.
I should note at the outset that I am using the term “dowry” in this post, simply because that is the term that is used in the judgment. It seems, however, that common law jurisdictions have customarily used the term “dowry” to refer to a payment made by a bride’s family, while the term “dower” has been used for arrangements of the type considered here (that is, a payment made by a husband or his family to this wife).
Ms Almarzooqi, the claimant, sought recovery of a “dowry” from Mr Salih. Ms Almarzooqi and Mr Salih had been married in the United Arab Emirates (UAE), which involved the parties entering into a contract of marriage. This contract provided that Mr Salih would pay Ms Almarzooqi a “deferred dowry” 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 UAE citizen with New Zealand residency, moved to New Zealand to live with Mr Salih, who had both Iranian and New Zealand citizenship. After a month of living together the parties separated, and Ms Almarzooqi eventually returned to UAE to file for divorce. The UAE Court awarded a default judgment in Ms Almarzooqi’s favour, ordering Mr Salih to pay the deferred dowry. Ms Almarzooqi subsequently issued the present New Zealand proceedings, pleading two causes of action: enforcement of the UAE judgment, and a claim for breach of the contract of marriage.
Mr Salih applied for an order for security for costs. In the context of determining that application, Associate Judge Johnston considered the likelihood of Ms Almarzooqi’s claims being successful, and concluded that the prospect of enforcing the marriage contract was “very poor” (at ).
The Court’s reasoning
In relation to the first cause of action, Associate Judge Johnston concluded that the UAE judgment was not enforceable under the common law rules for the enforcement of foreign judgments because the UAE Court had not had personal jurisdiction over Mr Salih when determining the claim. Counsel for Ms Almarzooqi argued that Mr Salih had submitted to the UAE Court’s jurisdiction by voluntarily appearing in the proceeding. The Associate Judge rightly rejected that argument. The marriage contract itself could not be construed as an agreement to submit to the jurisdiction of the UAE courts; and while Mr Salih had attempted to file a response to Ms Almarzooqi’s proceeding, the registrar in the UAE court had refused to accept the documents. The Associate Judge noted that “[i]t would be ironic if, having been prevented from submitting to the jurisdiction, Mr Salih was somehow deemed to have done so by the very actions that were thwarted by the rejection of this documentation” (at ).
In Pawson v Claridge HC Auckland CIV-2009-404-4367, 25 June 2010, Associate Judge Sargisson had previously considered whether an application for an extension of time that was rejected by the foreign court and struck from the file amounted to a submission to that foreign court’s jurisdiction. The Judge did not reach a conclusion on the matter, noting that it was arguable that the defendants should have specifically reserved their right to object to the court’s jurisdiction when entering the appearance. Her Honour did not specifically consider whether it was also arguably relevant that the application had been rejected and struck from the file. But in any case, Associate Judge Johnston expressed the view that “the court having struck the defendant’s appearance from the file, the defendant is entitled to be treated as not having entered any appearance at all” (at [40), and that the present facts were distinguishable because Mr Salih’s defence had not even been accepted for filing.
Whether an appearance that has been struck from the file may nevertheless amount to a submission to jurisdiction must surely depend on the facts of the particular case. However, the conclusion that Mr Salih had not submitted because his documents had never been accepted for filing appears to me to be unassailable. (It may be useful to note at this point that it is a curious feature of the rules for enforcement and recognition of judgments that, when determining whether the foreign court had personal jurisdiction over the defendant, the New Zealand court applies much stricter standards than it would apply to itself.)
It is the Court’s reasoning in relation to the second cause of action that I want to focus on here. This was Ms Almarzooqi’s claim for the debt alleged to arise from the contract of marriage. With the UAE judgment unlikely to be enforceable in New Zealand, the only way for Ms Almarzooqi to obtain relief in practice was to bring the claim afresh in the New Zealand court. The marriage contract provided that Mr Salih would pay Ms Almarzooqi a “deferred dowry” of about $212,000 in the event of Mr Salih’s death or the parties’ divorce. This promise was apparently enforceable under UAE law but, according to the Associate Judge, would not be enforceable under New Zealand law (see at  and following). Thus, the question was whether UAE law or New Zealand law applied.
The Court proceeded on the assumption that the question whether the promise was enforceable had to be resolved by the proper law of the contract. In other words, the Court characterised the issue as being contractual in nature, with the result that the choice of law rules relating to contract were applicable. The Court summed up these rules by stating that “in the absence of express agreement as to the proper law, the legal system with the closest connection with the dispute will be treated as the proper law of the contract” (at ). Here, the most important factor in identifying the law with the closest connection with the dispute was “the reality that [the parties] intended to, and did, reside in New Zealand”, and that the parties “must have intended the contract to govern their married life [in New Zealand]” (at -).
Application of New Zealand law
Whether a deferred dowry would be enforceable under New Zealand substantive law
The Associate Judge’s reasoning may be open to criticism on two fronts. The first concerns the Judge’s assessment that New Zealand substantive law would be hostile to the enforcement of a promise to pay a deferred dowry. I raise this question first because the answer may have implications for the second question, which is whether the Judge was right to conclude that New Zealand law – rather than the law of UAE – was applicable to the claim. In particular, the approach taken to the enforcement of a dowry as a matter of New Zealand substantive law is relevant to the proper characterisation of the claim for the purposes of choice of law.
I wonder whether it is truly right to say, as the Associate Judge did, that the New Zealand regime relating to marriage, maintenance and the division of relationship property is “entirely inconsistent with the terms of the contract of marriage” in this case (at ). It seems that the arrangement might not be caught by s 4 of the Property (Relationships) Act 1976, which excludes the rules and presumptions of the common law and of equity to the extent they apply to “transactions between spouses or partners in respect of property” (emphasis added). Perhaps there would be jurisdiction under s 182 of the Family Proceedings Act 1980 to vary the terms of the agreement, but that does not mean that New Zealand law is “entirely inconsistent” with the concept of a deferred dowry. I would be very interested to hear from family lawyers/academics on this.
To add a further comparative angle, it seems that the English Court of Appeal has been willing to enforce a promise to pay a deferred dowry as a matter of English contract law, through the incorporation of the relevant rules of Shariah within English law (Uddin v Choudhury  EWCA Civ 1205; see John R Bowen “How Could English Courts Recognise Shariah?” (2010) 7 University of St Thomas Law Journal 411 at 422 and following for an interesting analysis). English courts have also been willing to give weight to cultural factors when exercising their discretion under s 25 of the Matrimonial Causes Act 1973. In Otobo v Otobo  EWCA Civ 949, the Court of Appeal said that an English judge determining the question of ancillary relief pursuant to English law should “give due weight to [foreign] factors and not ignore the differential between what [the spouses] might anticipate from a determination in London as opposed to a determination in [the foreign country]” (at , see NA v MOT  EWHC 471 (Fam) for another example). In Quereshi v Quereshi  2 WLR 518, the Court enforced a deferred dowry in the context of recognising an extra-judicial divorce effected at the Pakistan High Commission.
Whether the promise to pay the dowry was governed by New Zealand law or the law of UAE
Proper law of the contract: The second point of criticism concerns the Associate Judge’s choice of law analysis. Assuming the Judge was right to characterise the issue as contractual (a question which I will consider briefly below), it seems to me that there was considerable strength in the argument that the proper law of the contract was the law of UAE.
New Zealand courts have not always been consistent in the way they have identified the proper law of a contract. Some courts have effectively applied three distinct connecting factors: express intention, implied intention and the place with the closest and most real connection (which is consistent with English authority: Bonython v Commonwealth of Australia  AC 201 (PC) at 219; Amin Rasheed Shipping Corp v Kuwait Insurance Co  AC 50 (HL)). Others, like the Associate Judge in this case, have subsumed the relevance of implied intention within the identification of the law with the closest connection, treating the two enquiries as interchangeable (see, eg, McConnell Dowell Constructors Ltd v Lloyd’s Syndicate 396  2 NZLR 257 (CA) at 272–273 per Cooke P).
Either way, to the extent that the purpose of the proper law is to give effect to the parties’ expectations, it seems that the law of UAE should have been a serious contender here. The parties had entered into the arrangement in the UAE, in accordance with local rules and customs, in circumstances where they must have appreciated that the concept of a dowry was foreign to New Zealand law. There is a point about cultural autonomy here. In this day and age, the conflict of laws should take seriously its role of protecting a person’s interest in cultural and religious self-determination. In fact, there is common law authority that an agreement to pay a deferred dowry that is valid under the proper law of the agreement is enforceable in the English court by way of an action for breach of contract. In Shahnaz v Rizwan  1 QB 390, the Divisional Court upheld such a contractual right to be paid a deferred dowry where the parties had been married in India in accordance with “Mohammedan law”. In a considered judgment, Winn J grappled with the policy questions raised by this issue, noting at 401-2:
“As a matter of policy, I would incline to the view that, there being now so many Mohammedans resident in this country, it is better that the court should recognise in favour of women who have come here as a result of a Mohammedan marriage the right to obtain from their husband what was promised to them by enforcing the contract and payment of what was so promised, than that they should be bereft of those rights and receive no assistance from the English courts.”
This is not to say that the contrary position – that a marriage contract is most closely connected to the law of the place where the parties are resident – is ill-founded. In particular, a good argument can be made that, insofar as contracts involving potentially vulnerable parties are concerned, identification of the proper law should rest on more objective factors that recognise, for example, a community’s interest in regulating the personal relationships of those who are members of that community. But this was not the approach adopted by the Associate Judge in the present case. Rather, the Judge appeared to be reasoning backwards, concluding that the parties must have intended to subject themselves to New Zealand law because the concept of a dowry was so outlandish that it would never be enforceable here (see ).
The bigger question of characterisation: The final question that I want to raise is whether the Court was right to characterise this issue as one relating to contract. The argument before the Court had proceeded on that basis, and we have already seen that there is authority to support that approach (Shahnaz v Rizwan  1 QB 390, where the Divisional Court specifically considered the question of characterisation). In fact, if there were a basis in New Zealand contract law to give effect to deferred dowry contracts (cf Uddin v Choudhury  EWCA Civ 1205), then it is very likely that characterising the issue as contractual for the purposes of the conflict of laws was the right approach.
An alternative view is that marriage contracts are not simple contracts. As the Associate Judge pointed out himself, the concept of a deferred dowry seems to fulfil functions that, in the New Zealand legal system, would be performed by laws on the division of relationship property and maintenance. The task of the conflict of laws is to identify the law that is most appropriate to govern the issue, having regard to the functions of the competing substantive laws (Dicey, Morris and Collins at [2-039]). It is possible, therefore, that the question of the enforceability of the dowry in this case should have been characterised as an issue relating to the property consequences of the relationship, or maintenance, with the result (potentially) that New Zealand law would have been applicable. For an interesting discussion of this question more generally, see Diana Schawlowski “The Islamic Mahr in German and English Courts” (2010-2011) 16 Yearbook of Islamic and Middle Eastern Law 147.
As I mentioned at the beginning of this post, the question of the merits of Ms Almarzooqi’s claim arose in the context of an application for security for costs. It would be prudent, therefore, not to attach too much weight to the Associate Judge’s reasoning – the precedential value of the decision may be limited. Nevertheless, it is important to remember that such decisions have real consequences for the parties involved. Ms Almarzooqi would be forgiven for having second thoughts about proceeding with her claim. That would be a shame – in my view, her claim deserves an opportunity for in-depth analysis.