The case of Almarzooqi v Salih has had a difficult history. Involving a claim under an Islamic nikah for the payment of a mahr, Ms Almarzooqi first sought to enforce a judgment from a Dubai court that had granted the order for payment. The Court of Appeal refused enforcement of the Dubai judgment on the basis that the court did not have personal jurisdiction over Mr Salih ([2021] NZCA 330, [2021] NZFLR 501). Leave to appeal to the Supreme Court was declined ([2021] NZSC 161, [2021] NZFLR 606). The plaintiff was left with no other option but to bring her claim again in the New Zealand court. The High Court held in the plaintiff’s favour ([2022] NZHC 1170), concluding that the agreement was governed by the law of UAE but that, whatever its proper law, the mahr had become payable. Mr Salih appealed, and the Court of Appeal has now decided that the case is not over yet, allowing the appeal and remitting the case to the High Court for reconsideration ([2023] NZCA 645).
The crux of the Court of Appeal’s decision was that the question of the nikah’s enforceability was governed by New Zealand law; that, pursuant to New Zealand law of contract, the nikah could not be properly interpreted without reference to its cultural context, including general principles of Sharia law; and that there was not sufficient evidence to undertake this interpretive task reliably in this case, due to the particular way the case had developed. Specifically, the question was whether, based on the general principles of Sharia law as applied as part of the factual matrix under New Zealand law of contract, the nikah required the defendant to pay the mahr by reason only of the fact of the divorce (or whether the plaintiff was required to make out specific grounds for divorce and, if so, whether she could do so on the facts).
Facts
I have outlined the facts of the case in previous posts on this blog (see here and here and here). Ms Almarzooqi, the plaintiff, 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 (the nikah). This contract provided that Mr Salih would pay Ms Almarzooqi a deferred mahr of about $230,000 in the event of Mr Salih’s death or the parties’ divorce. Ms Almarzooqi, a citizen of the United Arab Emirates (UAE), moved to New Zealand to live with Mr Salih, who had both Iraqi and New Zealand citizenship. After a few months the couple separated. Ms Almarzooqi subsequently obtained an order for divorce from the Dubai court on the ground that Mr Salih had mistreated her, as well as an order for payment of the mahr.
Promises to pay a mahr are enforceable under New Zealand law
The most important conclusion of the judgment – which is not, incidentally, a conflicts point – is that promises to pay a mahr are in principle enforceable under New Zealand law. This is a fascinating issue that is of practical importance to Muslim communities in New Zealand (see [13]).
The Court of Appeal confirmed that there was no reason why the nikah should not be enforceable on a contractual basis, referring to authorities from other common law jurisdictions ([69]-[91]). The nikah satisfied the pre-requisites for an enforceable contract, so “the mere fact it was entered into in the context of a religious ceremony should not, in itself, preclude it being enforceable as a contract at civil law” ([92]). Statutes like the Property (Relationships) Act 1976 (PRA) or the Domestic Actions Act 1975 (DAA) were no barrier to that conclusion ([94]-[99]). The nikah in this case was not entered into for the purpose of contracting out of the PRA ([98]), although this did not mean that a nikah could not be taken into account when making determinations under the PRA more generally ([99], see also here). The nikah was also not an agreement to marry, which meant the DAA was irrelevant ([94]). Finally, the nikah was not void as contrary to public policy ([100]-[101], referring to Radmacher v Granatino [2010] UKSC 42, [2011] 1 AC 534 in support of the conclusion; and see also here).
However, “[g]reat care” was needed when courts “embark on the task of interpreting a contract made within a particular cultural context” ([104]). The Court considered there were “some parallels with cases decided within the context of tikanga” (with the important difference, presumably, that tikanga is an independent source of law in Aotearoa New Zealand). This meant that nikah “cannot properly be interpreted in any given case without reference to that [cultural] context” ([105]) and required evidence about the general principles of Sharia law. The Court did not explain whether this approach effectively reflects the traditional doctrine of incorporation by reference, which allows parties to incorporate non-national law or principles into their contract to the extent permitted by New Zealand law (see Shamil Bank of Bahrain EC v Beximco [2004] EWCA Civ 19, [2004] 1 WLR 1784).
More specifically, the Court required evidence of general Sharia law as relevant under New Zealand law of contract, not the law of UAE. That is because there were differences in Sharia law as applied in different countries ([106]). Under UAE law, the reason for the divorce was irrelevant to the obligation to pay the mahr, but this did not mean that the position under New Zealand law would be the same. The Court did not elaborate on the interrelationship between general principles of Sharia as applied under New Zealand law, and general principles of contract interpretation. Based on the latter, it seems that there would be a good argument that the parties did not intend the mahr to depend on the reason for divorce, in light of the terms of the written document and the fact that a no-fault divorce would be available to them in the UAE and in New Zealand.
The proper law of the nikah
Insofar as questions of the conflict of laws are concerned, the Court of Appeal’s decision is interesting for two reasons: its (implicit) acceptance that the question of the nikah’s enforcement was to be characterised as contractual for choice of law purposes (for further analysis of this question, see here); and its particular approach to the identification of the proper law.
In relation to the latter, the Court set out the general test for the identification of the proper law of a contract: that the law governing a contract is the law the parties intended to be applicable or, in the absence of a choice by the parties, the law with the closest and most real connection. Interestingly, the Court did not seem to see a role for implied choice, saying that “in the absence of an express choice of law the task for the Court is to identify the jurisdiction with the closest and most real connection to the contract” (at [30]). The New Zealand position on implied choice of law has not been entirely clear (and the boundaries between express choice, implied choice and closest connection can be blurred in individual cases), but the evidence is now mounting that New Zealand courts treat implied choice as being of lesser general importance than some other common law courts (see Maria Hook and Jack Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at [6.13]-[6.16]).
The Court rejected the argument that the parties had made an express choice of UAE law. While the nikah showed an intention to be bound by Sharia law, this “did not equate to an express choice of UAE law” ([55]).
The law with the closest and most real connection was to be determined by reference to all the relevant circumstances, including “the place the contract was entered into and the circumstances in which it was entered into”, the form of the contract, the place of performance, and “the enforceability of the contract in the two jurisdictions, and any barriers to that process” (at [30]).
In the High Court, Simon France J had considered it particularly relevant that the parties had travelled to UAE to be married there in accordance with Sharia traditions (at [22], [26]). The intended residence in New Zealand was given less weight, partly because the obligation to pay the mahr “is unaffected by the place of residence” and “becomes relevant once the marriage is ended” (at [23]). Finally, despite the universality of the nikah (and the mahr), it was also relevant that UAE law – unlike New Zealand law – was a system reflecting Sharia principles (at [25]).
The Court of Appeal, on the other hand, considered that “the place where the contract would be performed, and the parties’ residency were significant” ([61]). There was an expectation that the couple would live permanently in New Zealand, and “[t]here was no reason to play down this aspect by suggesting that they might not do so” ([62]). If the marriage ended, the place of payment was likely to be New Zealand ([63]). What is more, there was a widespread practice of Muslim couples marrying by nikah in New Zealand in a domestic context, and New Zealand law was able to give effect to Sharia law concepts as part of the factual matrix of the contract. In these circumstances, the Court was “cautious” about the Judge’s reliance on the fact that UAE was a system reflecting Sharia principles ([66]-[67]). The parties married in the UAE to satisfy the wishes of the plaintiff’s family that “the couple marry in the UAE in a religiously appropriate ceremony”. The motivation for marrying in the UAE was not to “[secure] access to UAE law” ([68]).
The Court examined the issue carefully. Nevertheless, there are aspects of the reasoning that invite further analysis. For example:
- The (objective) proper law of the contract must be determined by reference to the circumstances as they existed at the time the contract was entered into. At that point, the plaintiff had not yet started her life in New Zealand, although the expectation was that the couple would live here. It is easy to imagine circumstances in which the parties could have changed their plans of settling in New Zealand (say, because of a job offer in Australia). In such circumstances, would it be unfair to subject a party in the plaintiff’s position to New Zealand law, to which she would have had no meaningful connection? This suggests that the expected place of residence ought to be treated with some caution, although the Court of Appeal was unpersuaded by the point. To the extent that the nikah is designed to protect the interests of the wife, it may also be appropriate to give greater weight to connecting factors that are focused on the wife, such as the country of the wife’s nationality or residence (here, the UAE).
- It does not seem unreasonable to assume that parties who enter into a contract would ordinarily expect that contract to be governed by a law that is well suited to give meaning to the contract. Here, UAE law seemed to have a clear answer to the question whether the fact of divorce was enough to trigger the obligation to pay the mahr. The position under New Zealand contract law, based on general principles of Sharia law, is more complex. In these circumstances, could the application of New Zealand law be understood as defeating the parties’ reasonable expectations as to choice of law? The Court of Appeal did not think so, emphasising the widespread practice of Muslim couples marrying by nikah in a New Zealand domestic context. However, the fact that Muslim couples in New Zealand are able to do so under New Zealand law, does not change the fact that, in a cross-border setting, foreign law might be a better fit and provide a more straightforward answer.
Some lingering characterisation issues
One of the main grounds of defence, which was only introduced on appeal, was whether the nikah was unenforceable as being contrary to the DAA and PRA. The Court rejected these arguments. From a conflicts perspective, it may be worth noting that the Court addressed these issues on the basis that the proper law of the nikah was New Zealand law. In other words, the Court seemed to suggest that the issues would not have arisen if the proper law had been UAE law (see [16]). However, it is not clear that issues under the DAA or PRA should be subject to the proper law of the contract (see here), although on the facts these characterisation questions were irrelevant.
